The Kospi index fell more than 20% from its June peak after a 5% slide on Wednesday, marking a technical bear market even though it has climbed 70% this year in local currency.

Samsung Electronics and SK Hynix, the market’s two biggest names, dropped 6.3% and 5.7% respectively. Analysts point to uncertainty over long‑term purchase agreements with data‑center clients as a key driver. US peers such as Micron have secured longer contracts, but it remains unclear whether Samsung and SK Hynix have done the same.

Volatility has been amplified by leveraged ETFs that magnify gains and losses. South Korean regulators warned of “excessive” leveraged trading, while fund managers see the decline as a “necessary correction” and a window for buying outside the AI space.

The correction arrives just before SK Hynix plans a U.S. listing that will raise $29bn, the largest share issuance by an Asian company. The IPO could restore confidence in the chip sector and signal a shift toward longer‑term contracts, a move that may lift valuations for both firms.