[Anchor]

The KOSPI was dragged down today (July 13) by large-cap semiconductor stocks, particularly SK Hynix. Expectations were high after the company's American Depositary Receipts (ADR) surged 12% on their first day of trading on the Nasdaq last week, but the primary shares on the KOSPI plummeted by 15%. This marks the largest single-day decline in the company's history.

Reporter Kim Hye-min has the story.

[Reporter]

The 15.3% drop recorded by SK Hynix today is the largest decline on record.

In a single day, 238 trillion won in market capitalization evaporated.

Expectations were high that the positive momentum would carry over to domestic SK Hynix shares after the company's ADRs, which listed on the U.S. Nasdaq on the 10th, closed more than 12% above their offering price. Instead, the stock suffered a record-breaking crash.

Analysts suggest the sell-off was driven by the dissipation of excitement surrounding the U.S. market entry, as well as foreign investors shifting their capital toward the more accessible U.S. ADRs.

However, it appears too early to judge the impact of the ADR, given that it is still in the early stages of listing and external variables such as escalating conflicts in the Middle East are at play.

[Lee Hyo-seob, Head of Financial Industry Research at the Korea Capital Market Institute: "The rise in ADRs does not seem to have much relevance to today's performance. If the price of SK Hynix ADRs in the U.S. shows a smaller decline or an increase, we expect it to have a positive impact on the primary shares tomorrow."]

Amid the uncertainty surrounding the effects of the ADR listing, concerns about a peak in the semiconductor cycle have resurfaced, freezing investor sentiment.

In a recent report, Korea Investment & Securities projected that SK Hynix's second-quarter operating profit would reach the 60 trillion won range, which is 8% lower than the market consensus of 65 trillion won.

Samsung Electronics, as well as Kioxia, Japan's top memory company by market capitalization, also fell by more than 13%, while U.S.-based Micron and SK Hynix ADRs are also showing downward trends in the over-the-counter market.

Although sharp declines driven by peak-cycle theories are becoming more frequent, the prevailing view in the securities industry remains that demand for memory will stay robust.

[Lee Jin-woo, Head of Research Center at Meritz Securities: "Around early September, our domestic memory companies conduct demand surveys with (foreign) clients. The rally actually began last year when we confirmed that demand was surging during that survey. The same process is scheduled for this year as well."]

With earnings announcements from U.S. big tech companies scheduled to begin later this month—starting with TSMC and semiconductor equipment maker ASML, followed by Alphabet and Meta—significant volatility is expected depending on the guidance provided by these firms.

(Reported by Lee Byung-ju and Shin Jin-soo | Video edited by So Ji-hye | Graphics by Kim Ye-ji)