SK Hynix shares dropped 10.95% in Seoul on July 16, reversing the previous session’s rally. A broader Asian chip selloff also dragged the KOSPI into its 37th sidecar of 2026.

Samsung Electronics fell 7.33% in the same session. The KOSPI opened at 6,960.50, down 4.45%, and losses deepened to an early morning low of 6,753.

SK Hynix Leads the Asian Chip Selloff

SK Hynix fell to a low of 1.823 million won, wiping out most of an 8% rally from the prior session. The stock had already logged its steepest one-day drop on Monday, as investors booked profits on AI-spending concerns.

Other Korean chip names slid alongside it. Seoul Semiconductor lost more than 5%, Samsung SDI fell over 2%, and LG Innotek dropped about 1%.

The weakness spread across Japan too. Advantest fell more than 6%, SoftBank Group slid nearly 7%, Tokyo Electron lost over 5%, and Renesas Electronics dropped 4%.

The region tracked an overnight slump on Wall Street. Micron Technology fell 7.94%, Marvell Technology dropped 7.27%, and Intel declined 4.43%. AMD and Lam Research each fell about 3%.

KOSPI’s 37th Sidecar Fires Again

The Korea Exchange triggered a sell-side sidecar at 9:10 a.m., the year’s 19th. KOSPI 200 futures had already fallen 5.22% to 1,104.40 points.

A sell-side sidecar suspends program sell orders for five minutes. It triggers whenever futures drop 5% or more for at least a minute.

By 9:21 a.m., the cash KOSPI had dropped to 6,886.48, a decline of 5.46%. Sidecars, both buy and sell combined, have now fired 37 times this year, including another KOSPI trading halt at the beginning of July.

The reversal came fast. Buy-side sidecars had fired on both the KOSPI and KOSDAQ just one day earlier. Foreign investors net-bought 2.33 trillion won of KOSPI shares, briefly pushing the index back above 7,000.

Analysts Flag a Crowded Trade

The selloff came despite strong earnings from ASML. The Dutch chip-equipment maker raised its full-year sales guidance for a second time this year. It projected revenue of 43 billion euros to 45 billion euros.

Louis Kondratev, a trader at XFUNDs, told CNBC the pullback reflects how crowded the AI-driven semiconductor trade has become.

“Semiconductors alone now make up roughly 20% of the S&P 500, which is incredibly difficult to sustain.”

— Louis Kondratev, trader at XFUNDs, CNBC

He added that valuations may struggle to hold at current levels even if earnings stay strong.

“Earnings momentum has been very strong, but it’s mostly concentrated in semiconductors, and that momentum may begin to slow as valuations find their place.”

— Louis Kondratev, trader at XFUNDs, CNBC

Regulators are also watching the volatility. South Korean officials met Thursday to discuss leveraged ETF products tied to single stocks, reviewing their growing market impact.

Whether this marks a one-day reversal or a deeper correction may depend on the earnings ahead.

Source: BeInCrypto