The 60-day correlation between South Korea's Kospi index and the Nasdaq 100 has climbed to roughly 0.50, the highest since 2021. The link is tightening because Samsung Electronics and SK Hynix together make up more than half of the Kospi. Their shares now move in near-lockstep with U.S. tech stocks as investors react to the same AI-driven demand signals.
Why the correlation is rising
Data-center demand accounted for about 40% of global DRAM demand last year. That share has now crossed half and is expected to keep climbing. Samsung and SK Hynix are the world's two largest memory-chip makers, so their fortunes are tied directly to AI infrastructure spending. Because they trade hours before Wall Street opens, their daily moves often serve as an early proxy for how U.S. tech stocks will behave later in the session. That dynamic has pulled the two indexes closer together.
The chip-driven selloff
On July 13, the Kospi suffered a chip-driven crash that sent the index down more than 8%. SK Hynix plunged 15%. The Nasdaq 100 fell 1.88% that same day, with Micron dropping 4%, SanDisk falling 12%, and Intel losing 7%. The Kospi has been in a technical bear market for the last month, and SK Hynix's recent selloff knocked the stock down 13% as doubts about AI capital expenditure spread.
A new rival in China
While South Korea's chip giants struggle, a Chinese competitor is surging. Changxin Technology Group (CXMT) saw its Shanghai-listed shares jump 466%, making it China's most valuable listed company. CXMT's rise underscores the growing competition in memory chips, even as global AI demand props up the sector. The question now is whether the Kospi's heavy reliance on two stocks makes it more vulnerable to a single piece of bad news — or whether the AI trade has enough runway to pull it out of bear territory.
