Kospi tumbles 6.4% as chip sell-off hits Asian markets

The Kospi fell about 6.4% on Thursday as heavy losses in major chipmakers weighed on Asian markets. SK Hynix shares dropped 11% and Samsung Electronics slid more than 8%, triggering temporary trading halts in several large names.

Taiwan Semiconductor Manufacturing Co. is scheduled to hold its quarterly earnings call at 2 a.m. New York time on Friday. Estimates point to second-quarter net profit near NT$632.6 billion, a 59% increase that would mark a fifth consecutive record. Investors are focusing on forward-looking details such as demand for advanced chips, packaging capacity and capital expenditure plans rather than the headline profit number.

Japan’s Nikkei fell almost 3%, while Hong Kong markets outperformed the region. Bond markets found support after U.S. producer prices declined in June, and short-dated Treasury yields were lifted by softer inflation data.

South Korea bore the heaviest impact because technology and semiconductors make up a large share of the market. Heavy declines in Samsung and SK Hynix pushed the Kospi into bear-market territory and led to temporary trading halts for several major stocks.

The Bank of Korea raised its policy rate to 2.75%, the first increase since January 2023. The central bank cited elevated consumer-price growth, rising household debt and pressure on the won after consumer inflation exceeded 3% in May and June.

U.S. producer prices fell 0.3% in June, the largest monthly decline in 14 months, with energy costs down 6.4%. Those data reduced the market-implied probability of a July Federal Reserve rate increase to about 10%.

Energy markets were another source of market attention. Brent crude remained above $85 a barrel and oil prices rose about 12% over the week as tensions between the U.S. and Iran raised risks to energy flows.

Dutch equipment maker ASML increased its 2026 sales outlook to €43 billion–€45 billion after reporting quarterly revenue of €9.3 billion and net income of €2.9 billion. Market focus has moved from headline earnings to guidance on future demand, capacity and investment for chip-related equipment.

TSMC’s results are expected to be closely monitored for guidance on customer demand, capacity utilisation and capital spending.