Foreign investors pulled roughly $13 billion out of South Korean equities in July 2026 as the KOSPI index dropped about 33% from its June peak. Global funds kept buying Samsung Electronics and SK Hynix anyway, betting that AI-driven demand for memory chips still holds up over the long run.
Foreign investors pulled roughly $13 billion, or about 18.5 trillion won, out of South Korean equities in July 2026 alone. Over the same stretch, the KOSPI dropped approximately 33% from its June peak through late July, and the rout wiped out about $2 trillion in market value in a matter of weeks.
At one point the index lost 16% over two days in late July, a decline sharp enough to trigger circuit breakers. That stretch capped a longer slide: cumulative foreign net selling in the first half of 2026 reached approximately 116.36 trillion won, or about $81 billion, with foreign investors net sellers for six straight months before July's collapse.
Chipmakers still draw buyers
Samsung Electronics and SK Hynix together account for over half of KOSPI's total market value, and both stocks powered the AI-driven rally that inflated Korean equities in the first place. Yet the memory chip cycle wobbled: SK Hynix delivered disappointing earnings that shook confidence, and margin pressure from softening memory chip prices added to the selloff. China's CXMT compounded the strain, steadily building out its own DRAM production and pressuring Korean incumbents on price.
Despite that mix, some global funds kept buying into the chipmaker thesis. Samsung and SK Hynix remain among the very few companies capable of producing the most advanced semiconductor memory products, and their 33% drawdown attracted selective interest from investors who view AI infrastructure buildout as a multi-year trend.
What the selloff signals for AI trades
Fading enthusiasm for AI investments was cited as a key driver of the selloff. South Korea's semiconductor exports are a bellwether for global tech demand, and the correction suggests investors are recalibrating their expectations for AI-related capital expenditure cycles.
Leverage amplified the retreat. Single-stock leveraged vehicles, popular among Korean retail traders, fed cascading selloffs, as margin calls forced involuntary selling that pushed declines beyond what fundamentals alone would justify.
Source: Crypto Briefing
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