The benchmark KOSPI stood at 5,706.68 points as of around 9:10 a.m., down 3.89 percent from Thursday's close of 5,937.66. The sharp decline followed a 1.24 percent loss the previous day, when the index surrendered the 6,000 mark just one session after reclaiming it.
Foreign investors sold a net 72.2 billion won (US$53.9 million) of KOSPI shares, while institutions unloaded 88.3 billion won. Retail investors bought a net 141.8 billion won, absorbing part of the selling. Decliners outnumbered advancers 706 to 121.
The heaviest pressure fell on semiconductor stocks, reversing much of the optimism generated by record third-quarter earnings and shareholder returns announced by the country's two largest chipmakers earlier this week.
Samsung Electronics fell 3.45 percent to 224,000 won, while SK hynix plunged 7.01 percent to 1,419,000 won close to the opening bell. Samsung Electronics' preferred shares dropped 5.06 percent to 174,600 won, while SK Square, a major shareholder in SK hynix, declined 5.14 percent to 904,000 won.
The losses came despite strong quarterly profits from both chipmakers. Samsung reported third-quarter operating profit of 107.4 trillion won Thursday and announced a 30 trillion won quarterly dividend, bringing its planned shareholder returns for 2026 to as much as 110 trillion won.
Its rival SK hynix also reported record third-quarter operating profit of 83.33 trillion won Wednesday, alongside major shareholder returns and long-term supply agreements covering more than half of its planned production capacity for 2027 and 2028. The announcements initially supported chip shares, but Friday's selloff showed that strong earnings alone were no longer enough to reassure investors.
The latest blow came from Wall Street overnight, where Google parent Alphabet plunged 12.64 percent after revenue fell short of market expectations and rising artificial intelligence (AI)-related spending reignited concerns over whether massive infrastructure investments would generate sufficient returns.
The Nasdaq Composite fell 1.38 percent, while the S&P 500 declined 0.30 percent and the Dow Jones Industrial Average slipped 0.25 percent.
Semiconductor shares also weakened, with Micron Technology dropping 4.98 percent and Advanced Micro Devices (AMD) losing 2.08 percent. The Philadelphia Semiconductor Index fell 1.42 percent, adding to concerns over the outlook for chip stocks in Seoul.
The renewed AI concerns struck an already volatile Korean market. The KOSPI had surged a combined 9.93 percent over two sessions through Wednesday, buoyed by foreign buying and strong semiconductor earnings, before retreating Thursday. Friday's losses threatened to erase much of that rebound as foreign investors shifted back to selling.
The downturn spread well beyond chipmakers. Samsung Electro-Mechanics sank 7.19 percent to 1,200,000 won, while battery maker LG Energy Solution fell 1.40 percent to 351,000 won.
Hyundai Motor dropped 3.08 percent to 283,500 won, while financial stocks also weakened, with KB Financial Group losing 2.30 percent to 153,200 won. In healthcare, Samsung Biologics declined 0.59 percent to 1,358,000 won, while Samsung Life Insurance fell 3.96 percent to 267,000 won.
The junior KOSDAQ index also suffered heavy losses, sliding 3.17 percent to 729.32 as of around 9:10 a.m. from Thursday's close of 753.23. Foreign investors sold a net 22.7 billion won, while institutions unloaded 26.4 billion won. Retail investors bought a net 58.9 billion won. Decliners overwhelmed advancers 1,385 to 235.
Selling spread across biotechnology, battery materials, robotics and semiconductor equipment makers.
Alteogen, a biotechnology company developing drug-delivery technologies that allow intravenous medicines to be administered through subcutaneous injections, fell 1.82 percent to 216,000 won. HLB, a biotechnology group focused on cancer treatments, lost 2.02 percent to 38,900 won.
Battery-related shares also declined. EcoPro, the holding company of a battery-materials group, dropped 2.32 percent to 71,600 won, while its cathode-materials subsidiary EcoPro BM fell 2.28 percent to 89,900 won.
Among technology stocks, semiconductor deposition equipment maker Jusung Engineering slid 4.46 percent to 169,100 won. EO Technics, a maker of laser processing equipment used in semiconductor and display production, plunged 6.39 percent to 388,500 won.
Robotics shares were also caught in the selloff. Rainbow Robotics, a developer of industrial and humanoid robots, fell 5.16 percent to 358,500 won.
The South Korean won, meanwhile, traded at 1,337.7 per dollar, compared with 1,336.8 in the previous session.
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