Korean KOSPI Index Halts Decline and Rises, SK Hynix Gains 3%, Samsung Turns Positive with a Gain of 0.9%

The Korea Composite Stock Price Index (KOSPI) fell more than 3% at one point during trading on Wednesday, dragged down by the overnight decline in the US chip and artificial intelligence sectors, and the breakdown in labor negotiations at Samsung Electronics, with Samsung's stock dropping as much as 6.1% during the session. However, market sentiment later reversed, and KOSPI turned positive, reporting 7,582 points, with a gain of 0.80%.

Samsung Electronics' stock dropped 6.1% at one point, dragging down the index, but then turned positive with a 0.9% increase. After the breakdown in union negotiations, the market is concerned that Samsung may face a large-scale strike in the near future, which could impact the global supply of DRAM and NAND Flash chips.

The American Chamber of Commerce in Korea (AmCham Korea) had previously warned that a strike, if it were to occur, would have an additional impact on the global memory chip market. It is worth noting that some Samsung employees have also publicly called for the union to reach an agreement as soon as possible, believing that the losses from a strike would be borne collectively by all employees.

SK Hynix dropped as much as 2.9% at one point, directly affected by the overnight decline in the US semiconductor and AI sectors. This year, SK Hynix has seen its stock price surge significantly due to the scarce position of high bandwidth memory (HBM) chips in AI infrastructure construction, but its high correlation with US tech stocks has also made it more vulnerable when foreign risk appetite contracts.

The South Korean KOSDAQ index, which tracks technology stocks, is also under pressure, with the small-cap technology sector falling as much as 2%, indicating that the selling sentiment has spread from blue-chip weight stocks to small and medium-cap sectors.

In the short term, the market is watching whether Samsung's labor negotiations can resume before the strike officially starts, and whether US tech stock valuations can stabilize to provide external support for South Korea's chip sector. If both continue to weigh on the market, KOSPI's high-level adjustment may not be over yet.