South Korea’s KOSPI Crashes 6.5% Today – AI Crypto Down 10%

South Korea’s KOSPI index crashed 6.5% on 13 October, falling to around 6,002 as investors sold semiconductor stocks. The drop followed Chinese chipmaker CXMT’s announcement of a new memory chip design, raising fears of stronger competition for South Korean giants like Samsung Electronics and SK Hynix.

This drop has also impacted AI-related tokens such as NEAR, ICP, FET, and TAO, which fell 5% to 10%.

KOSPI Crashed as China’s New 4F² Chip Triggers Sell-Off

The KOSPI index fell 400 points to 6,002. The index has dropped more than 13% in five days and is now over 35% below its record high in June.

Meanwhile, the sharp fall forced South Korea’s stock exchange to step in after KOSPI 200 futures dropped more than 5%. The exchange used a safety measure called a “sidecar” to slow down fast computer-driven trading and help calm the market.

The sell-off came from China’s chip industry could challenge South Korea’s lead in memory chips. ChangXin Memory Technologies (CXMT), a Chinese chipmaker, announced a new 4F² memory-cell design that could reduce the space needed for DRAM cells by about 30%

The company aims to bring its next-generation server memory chips into mass production by the end of 2026. 

AI & Semiconductor Company Stocks Drop

The news hit AI & Semiconductor company stocks hard. Samsung Electronics shares fell more than 7.4%, while rival SK Hynix dropped over 8.8%. 

In Japan, chip equipment maker Tokyo Electron fell 6.6%, and OpenAI-backer SoftBank Group shares dropped more than 8%. 

However, Taiwan Semiconductor Manufacturing Co. (TSMC) was also affected by the tech sell-off, falling by 1.8%.

However, foreign investors added to the sell-off by pulling nearly 2 trillion won ($1.5 billion) out of South Korean stocks on October 12. They sold a total of 8.46 trillion won worth of shares in October.

How Is the KOSPI Crash Affecting AI Crypto?

The stock market sell-off has also weighed on cryptocurrencies. The global crypto market cap stood at around $2.91 trillion, while Bitcoin briefly fell below $84,000 and traded near $83,560.

AI-related tokens have also come under pressure, with the sector falling 7.7% to $25.51 billion today. An AI token like NEAR dropped 10%, while ICP fell over 9% to $3.19. FET declined 9.4%, Virtual Protocol lost more than 6%, and TAO fell over 5%.