THE ESSENTIALS IN 30 SECONDS

  • The KOSPI fell 5.28% to 5,383.80 on 5 November; SK hynix lost 9.46% and Samsung Electronics 7.57%, according to The Korea Times.
  • Korean media tied the drop to concern that tighter US regulation of AI infrastructure after the Democrats' midterm wins could curb data center investment and memory demand.
  • KED Global reports foreign investors sold for a fifth straight session, about $1.3 billion of shares, while a Kiwoom Securities analyst expects limited impact on projects already under way.

South Korea's benchmark stock index fell sharply on Thursday, 5 November. The KOSPI opened 1.82% lower at 5,580.09, never recovered and closed down 5.28% at 5,383.80, The Korea Times reports. KED Global describes it as a seven-month low.

Chipmakers take the hit

The two memory makers whose fortunes are most closely tied to the AI boom led the decline. SK hynix fell 9.46% to 1.26 million won and Samsung Electronics dropped 7.57% to 201,500 won. Together they make up roughly half of the index's market value, according to The Korea Times, which also notes overnight losses in the US for Nvidia (3.17%), Micron (7%) and SanDisk (7.91%). KED Global reports that foreign investors were net sellers for a fifth consecutive session, offloading about $1.3 billion of shares. The won weakened slightly, ending at 1,342.1 per dollar.

Not every sector fell. Drug and biotech stocks rose on hopes of US policies to lower health care costs, including support for biosimilars: Celltrion gained 7.5%, Hanmi Pharmaceutical 9.8% and Samsung Epis Holdings 14.33%.

The data center question

Both outlets link the chip sell-off to the US midterm elections, in which, according to The Korea Times, Democrats won control of the Senate and the House. Investors are said to fear that closer scrutiny of AI and data center construction in Washington could slow new projects, prompting cloud companies to rethink the timing of their spending and weakening demand for high-bandwidth memory. These are market interpretations reported by the press, not announced policy changes.

Some analysts urge caution about that reading. Han Ji-young of Kiwoom Securities told The Korea Times that worries about delays to new data centers could widen the gap between AI-related and other stocks, but that "data center projects already underway are unlikely to face major delays." She also argued that nationwide restrictions would be hard to pass, citing the presidential veto, divisions among Democrats and Washington's wish to keep its lead in AI.

The swing was abrupt. On 4 November, as Democratic gains became clear, the KOSPI still edged up 0.6%, with battery and solar stocks rising while chipmakers slipped, KED Global reported. Whether Thursday's move marks a lasting reassessment of AI infrastructure demand or a one-day reaction to the vote is not yet clear.