The KOSPI (Korea Composite Stock Price Index), South Korea’s primary stock market index, has seen significant volatility in 2026, particularly in the context of a booming AI chip market. In the first half of the year, the iShares MSCI South Korea ETF (EWY) more than doubled; however, it has since plunged nearly 50% in the past 40 days, dropping from $220 to below $150. Samsung Electronics and SK Hynix dominate the index, accounting for approximately 50% of its value.
In response to this extreme market volatility, South Korea’s Ministry of Economy and Finance convened an emergency review and announced stabilization plans, likely involving liquidity infusion to support the market. Investors are now weighing the prospects of buying into EWY as it approaches key technical levels, despite the risk factors associated with current market dynamics.
The KOSPI’s performance reflects broader trends in the AI sector, with continued demand for high-bandwidth memory products from major players SK Hynix and Samsung amidst global shortages. As it stands, the future trajectory of the KOSPI remains uncertain, driven by both domestic and international economic conditions.
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