KOSPI Falls Below 6000 Amid 'Redchip' Shock

'Redchip' shock has hit the South Korean stock market. Following the announcement that China's Changxin Memory Technologies (CXMT) will release next-generation server DRAM within the year, shares of Samsung Electronics and SK Hynix plummeted, causing the KOSPI to fall below the 6000 mark. The KOSPI's market capitalization evaporated by 289 trillion won, dropping below 5000 trillion won for the first time in two and a half months. Market experts expressed concerns that "uncertainty will persist due to issues like foreign investor withdrawals and supply-demand problems."

On October 13, the Korea Exchange reported that the KOSPI closed at 6035.35, down 348.89 points (5.46%) from the previous trading day. This decline marks the largest drop since August 19. The index fell as low as 5911.11 (-7.41%) during the day but managed to recover slightly above 6000 by the end of trading.

The sharp decline in the stock market was significantly influenced by concerns over the profitability of AI companies, coinciding with news of CXMT's technological advancements. The announcement of CXMT's next-generation server DRAM release hit semiconductor stocks hard. Major players in the semiconductor sector, including Samsung Electronics (-5.79%) and SK Hynix (-8.16%), along with SK Square (-11.38%) and Samsung Electro-Mechanics (-6.99%), experienced steep declines. Foreign investors also continued to sell off, with individuals and institutions purchasing a net 2.973 trillion won and 1.7412 trillion won, respectively, while foreign investors sold off a staggering 5.201 trillion won.

As a result of the market crash, the KOSPI's market capitalization sharply decreased, falling to 4979 trillion won, marking the first time it has dipped below 5000 trillion won since July 30. The KOSDAQ also showed weakness, closing down 12.16 points (1.43%) at 837.03.

Han Ji-young, a researcher at Kiwoom Securities, noted that "the announcement of CXMT's next-generation server DRAM has raised concerns about the competitiveness and market share of domestic memory companies." He added that "the KOSPI's breach of the 200-day moving average has raised fears of a technical trend deterioration." He further explained that there was a large-scale adjustment of foreign positions and profit-taking, along with a temporary supply-demand gap following the end of Samsung Electronics' stock buyback program, contributing to the weakened domestic supply-demand environment.

Kim Dong-won, head of research at KB Securities, stated, "Market skepticism regarding the semiconductor industry is growing. While the semiconductor cycle has not ended, it is difficult to completely dismiss the suspicion that it is a cyclical industry."