South Korea's stock market plunged at the open as U.S. President Donald Trump's relentless flip-flopping remarks on Iran collided with the shock of Google's new artificial intelligence memory compression algorithm "TurboQuant." Samsung Electronics (005930.KS) and SK hynix (000660.KS) fell roughly 4% in tandem, dragging the KOSPI index back to the 5,200 level in one stroke.
As of 9:10 a.m. on the 27th, the KOSPI was down 3.45% from the previous session, trading below the 5,300 line. The index opened 158.26 points (2.90%) lower at 5,302.20 before rapidly extending losses under a barrage of foreign selling. Foreign investors dumped 566 billion won ($413 million) on the KOSPI market alone in the first 10 minutes of trading. The KOSDAQ also opened 16.68 points (1.47%) lower at 1,119.96 and continued to widen its decline. Not a single stock among the KOSPI's top 50 by market capitalization was in positive territory. Samsung Electronics and SK hynix, the twin pillars of the domestic market, led the index lower with opening drops of 3–4%.
The main driver behind the sell-off was Trump's seesaw rhetoric. During the New York trading session the previous day, Trump unleashed hawkish remarks that heightened geopolitical tensions, saying "I'm not sure we'll reach a deal with Iran," "Iran is begging to negotiate," and "I will remember NATO for not cooperating in the war." After the close, however, he reversed course, saying the deadline for striking Iranian power plants had been extended by 10 days to April 6 and that "negotiations with Iran are going very well," maximizing market fatigue. In the aftermath, all three major U.S. indexes fell on the 26th (local time): the Dow Jones (-1.0%), S&P 500 (-1.7%), and Nasdaq (-2.4%).
Google's newly announced AI data compression algorithm "TurboQuant" poured fuel on concerns about slowing semiconductor demand. TurboQuant is a technology that losslessly compresses the data AI uses to retain context down to 3-bit (FP3) format. Google said that applying it could reduce AI memory usage by up to six times and boost computation speed by up to eight times on Nvidia H100 graphics processing units (GPUs). This means software optimization alone could significantly reduce dependence on hardware memory such as high bandwidth memory (HBM). As fears of declining semiconductor demand intensified, the Philadelphia Semiconductor Index fell 4.8% overnight.
Even amid the market rout, stocks linked to the Aekyung Group rose on news of a completed merger and acquisition deal. At the same time, Aekyung Chemical (161000.KS) was up around 16% and Aekyung Industrial (018250.KS) was up around 6%. On the 26th, Aekyung Industrial finalized its acquisition process with Taekwang Industrial and was officially incorporated as a Taekwang Group affiliate. The resolution of governance uncertainty stemming from the management stake sale is seen as having unleashed pent-up buying interest.
Lee Sung-hoon, a researcher at Kiwoom Securities, said, "The domestic market is expected to open lower early in the session, reflecting the U.S. market correction driven by Iran war noise and the plunge in U.S. semiconductor stocks triggered by Google's TurboQuant." He added, however, "Considering the extension of Trump's deadline for striking Iran announced after the close and the fact that domestic semiconductor stocks had already priced in some of the correction the previous day, we expect bargain-hunting appeal to emerge as the session progresses, narrowing the losses."
