South Korea Stock Market Crashes 44% in 40 Days: Here’s Why

South Korea’s stock market has crashed nearly 44% in 40 days. The downtrend has erased nearly $2 trillion in market cap. The crash was led by two of the largest companies, SK Hynix and Samsung. The South Korean authorities have announced plans to stabilize the market, but let’s discuss where exactly things went wrong.

Why Did South Korea’s Stock Market Crash?

South Korea’s stock market surged by more than 135% from December 2025 till June 2026. The country’s stock market rose from outside the top 20 in the global ranks to the 6th position within months. So what propelled South Korea’s stock market so such heights? Well, it was AI.

AI has taken center stage and AI chip manufacturers are reaping massive benefits. However, every AI chip requires memory. This is where SK Hynix and Samsung Electronics come in. The two are among the biggest AI memory chip manufacturers in the world. The surge in AI demand has led to a massive uptick in the need for memory chips. South Korea’s entire stock market ballooned thanks to SK Hynix and Samsung. The two stocks accounted for nearly 50% of the entire South Korean stock market.

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