Kospi plunges 5.46%, US chip stocks fall on Chinese competition fears

Key Facts

South Korea's Kospi index closed the 13 October 2026 session down 5.46% at 6035.35 points, alongside pressure on US chip stocks that Reuters linked to concerns over Chinese competition and artificial intelligence spending. According to an Alpha Economy report published on Investing.com, the Korean index's losing streak extended to 5 consecutive sessions at the close. The selloff included SK Hynix, which ended the session down 10.09%, according to the same report on the Korean market. Samsung Electronics fell 7.39% in the same session, adding to losses among Korean chip stocks. SK Hynix's decline was thus steeper than Samsung's, while both fell more than the broader index at the close.

In the US market, Applied Materials shares fell 6.5% during trading on 13 October, according to a Benzinga midday update. Micron dropped 4.9% in the same update, with both companies' shares facing selling during US trading. Across the sector, Reuters said the Philadelphia Semiconductor Index fell 1.5% during the session, a smaller decline than those of the two companies. The drop came as the index remained up more than 70% for the year, according to the agency's update during the selloff. The index thus retained its gains since the start of the year despite its intraday decline, compared with steeper daily losses for Micron and Applied Materials.

Reuters linked weakness in semiconductor stocks to reports of a technological advance at China's CXMT involving memory technology. The agency said the advance described in those reports raised concerns about competition within the sector as shares fell during the selloff. It added that these concerns compounded existing anxiety over artificial intelligence spending, with both factors weighing on chip stocks. In the context of the same technological development, Reuters reported that Samsung Electronics was also working on an innovation similar to the memory technology covered in the reports. It added that SK Hynix was working on a similar innovation, with development efforts spanning the two Korean companies whose shares fell during the session.

Micron's share price decline followed the company's fiscal fourth-quarter results announcement, which preceded the selloff and included quarterly and annual revenue comparisons. Micron said in its earnings statement that revenue for the fiscal fourth quarter of 2026 totaled $54.23 billion. For the quarterly comparison, the company had reported revenue of $41.46 billion in the fiscal third quarter of the same year. For the annual comparison, revenue in the corresponding period of 2025 was about $11.32 billion, according to the company's statement. Revenue for the reported quarter was thus higher than in both the preceding quarter and the corresponding period a year earlier, before the stock fell during the selloff.

In Johnson & Johnson's third-quarter 2026 results, medical devices sales missed analysts' estimates for the second consecutive quarter, according to Reuters. Analysts had estimated sales for the segment at $8.71 billion, according to London Stock Exchange Group data cited by the agency in its quarterly earnings coverage. On international operations, the company's chief financial officer said the Middle East conflict weighed on results, among the factors he discussed in explaining performance. He also cited austerity measures in Europe as another factor affecting the company's international results. Pricing in China added to those pressures, in an explanation spanning the Middle East, Europe and China, as medical devices sales again fell short of estimates.

The selloff followed remarks by Broadcom Chief Executive Hock Tan, who likened investment in the artificial intelligence sector to "gambling in a casino," according to Reuters. On the economic calendar following the session, the US Consumer Price Index release was scheduled for 14 October 2026, according to the US Bureau of Labor Statistics schedule. The release covered consumer price data for September of the same year, according to the date listed by the bureau. Publication was set for 08:30 a.m. Eastern Time, following the session in which Korean and US stocks declined. After the inflation release listed on the calendar, the Federal Reserve's next Federal Open Market Committee meeting was scheduled for 27–28 October 2026, according to the US central bank's meeting schedule.