US Tech Stocks and South Korea's KOSPI 60-Day Correlation Rises to 0.50, Highest Since 2021
The 60-day correlation between the US Nasdaq 100 and South Korea's KOSPI has climbed to about 0.50, the highest since 2021, according to data from an asset management firm. Samsung Electronics and SK Hynix, which together account for over half of the KOSPI's weight, are central to the linkage as key suppliers of memory chips for AI hardware. On July 13, SK Hynix's 15% plunge drove the KOSPI down over 8% and the Nasdaq 100 nearly 2%. Subsequent selloffs on July 27-28 saw US and Korean semiconductor stocks drop sharply, with SK Hynix falling over 10% and Samsung Electronics over 8%.
The correlation between the US and South Korean stock markets has risen to its highest level since 2021. According to data from an asset management firm, the 60-day correlation between the Korea Composite Stock Price Index (KOSPI) and the Nasdaq 100 index has recently climbed to about 0.50. This trend reflects the growing dominance of Samsung Electronics and SK Hynix in the South Korean stock market, as the two companies together account for more than half of the KOSPI's weight. Both are at the core of the artificial intelligence hardware supply chain, supplying memory chips to data centers of major US technology companies.
This close linkage has made the South Korean stock market a key barometer for global AI trading. For example, on July 13, SK Hynix's share price plunged 15%, dragging the KOSPI down more than 8%. On the same day, the Nasdaq 100 fell nearly 2%, and US technology stocks such as Micron Technology, Sandisk, and Intel also declined.
On July 27, US semiconductor stocks experienced another sell-off, with the VanEck Semiconductor ETF falling more than 2%, AMD and Teradyne dropping 5% and 4% respectively, and Micron Technology declining about 2%. On July 28, South Korean semiconductor stocks followed with sharp declines: SK Hynix fell more than 10%, Samsung Electronics dropped more than 8%, and other AI-related stocks such as Samsung SDI, LG Innotek, Seoul Semiconductor, and LG Chem also recorded losses of varying degrees.
The rebound in South Korean memory chip stocks has lagged behind that of the Nasdaq, but the scale and volatility of the recent recovery have positioned them as a bellwether for broader AI trading. Samsung's earnings guidance, typically released two weeks ahead of major US semiconductor companies, is regarded as one of the first concrete signals of global AI demand each quarter. The fortunes of US and South Korean technology stocks are increasingly driven by shared sentiment toward AI hardware trading.
Because half of the KOSPI is tied to cyclical themes, a slowdown in capital expenditure by hyperscale technology companies would have a greater impact on the South Korean market. South Korean memory stocks are more volatile than many US chipmaker stocks, and the size of leveraged exchange-traded funds amplifies the swings.