KOSPI Plunges 4.46%, 6500-Point Support Under Threat
Miles Bennett
KOSPI closed down 4.46% at 6,516 on July 20, losing more than 10% over two sessions; 6,500 is the key support line Goldman Sachs flagged — below it, the next floor is 6,000.
Down 10% in two days — what happened?
KOSPI closed at 6,516.27, hitting an intraday low of 6,472 — a drop exceeding 5% at its worst.
The index had already fallen 6.37% on July 16, the last session before Korea's Constitution Day holiday. Two-day cumulative loss: over 10%.
This means → the global semiconductor sell-off that erupted during the holiday was compressed into a single opening session for Korean stocks.
How bad was the global chip sell-off?
The Philadelphia Semiconductor Index fell a cumulative 5.85% over two days, with an intraday trough of 9.71%.
TSMC dropped 7.29% in a single session; Kioxia — Japan's leading memory-chip maker — plunged 16.10%.
In plain terms = chip stocks worldwide were hit by a stampede. Korea's market was closed for the holiday; when it reopened, the catch-up selling was even sharper.
Who was selling and who was buying?
Foreign investors and retail traders were net buyers of over ₩200 billion, partly cushioning the fall.
Institutional investors net-sold ₩2,439 billion, with financial-investment firms alone dumping ₩2,956 billion — the main source of selling pressure.
This means → the sell-off was driven by Korean domestic institutions, not a foreign exodus. This looks more like active deleveraging than panic flight.
Can 6,500 hold?
Goldman Sachs previously identified 6,500 as KOSPI's immediate support after the 6,800 level broke, with the next zone at 6,100–6,000.
Daishin Securities notes that KOSPI's 12-month forward P/E — a valuation based on the next year's estimated earnings — stands at just 5.81×, in its historical low range.
NH Investment Securities estimates a reasonable "floor" at a forward P/B of 1.3–1.4×, translating to a KOSPI level of roughly 6,000.
Have semiconductors really peaked?
NH Investment Securities analysts stressed it is "too early" to say the semiconductor cycle has topped out.
Multiple analysts argue the sell-off is fundamentally about position adjustment, not a real deterioration in chip demand.
In plain terms = the market is not worried that chips have stopped selling. It is worried that last quarter's numbers — Micron's net profit up 15× year-on-year, Samsung's operating profit up 17× — simply cannot be sustained. Valuations need to digest that reality.
What comes next?
DS Investment Securities argues supply-glut fears are overstated: new capacity, including Samsung's Hunan fab, will not contribute meaningful supply before 2035. DRAM will remain in severe undersupply through 2026 and 2027.
U.S. big-tech earnings season begins this week. Alphabet on July 23 — watch for capital-expenditure guidance and cloud profitability. Intel on July 24 — watch for a server-CPU shipment recovery.
This means → these earnings will test both AI demand durability and whether chip stocks can escape their deleveraging and valuation-compression trap. The results may decide whether 6,500 is a floor — or just a waypoint.
Content is for reference only, not financial advice.