Korea Composite Stock Price Index is down 5.9% in afternoon trade as Samsung Electronics and SK hynix slide

At 3 p.m. in Seoul on Tuesday, ahead of the 3:30 p.m. close, the Korea Composite Stock Price Index, the Kospi, was down 5.9% at 6,005.95. It had fallen as much as 7.4% from Monday's close, to 5,911.11.

Samsung Electronics was down 8.1% in afternoon trade, and SK hynix was down 10.2%.

Cao Kanyu, president of ChangXin Memory Technologies, or CXMT, said on Saturday, at a conference in Shanghai, that the company aimed to launch a server memory module by the end of 2026. The Seoul Economic Daily reported the remarks on Monday.

The module is a standard part for servers. It is not high-bandwidth memory, or HBM, the stacked chips paired with AI processors.

The Seoul Economic Daily said the design cuts the area of each memory cell by about 33% from the one the industry uses now, so a chip of the same size can hold more data. On Tuesday the paper attributed the drop to concern that the plan would add supply of DRAM, the memory in servers and computers.

Samsung is targeting mass production of its own version of the design in 2028, Businesskorea reported.

Industry officials in South Korea told the Seoul Economic Daily it was difficult to conclude that CXMT had pulled ahead, and that large-scale production was still uncertain.

"We're not even talking about HBM here, and the Korean chipmakers are still unquestionably dominating that space, with very little threat at all from the likes of CXMT or anyone else for the foreseeable future," Phillip Wool, chief market strategist at Rayliant Global Advisors, told CNBC.

Investors outside Korea hold the market through the iShares MSCI South Korea ETF, CEWY. As of Monday, SK hynix was 24.1% of the fund and Samsung Electronics was 23.5%, together 47.6%. The fund's last regular-session close was $170.11, down 4.0%. The New York session has not opened, so Tuesday's drop in Seoul is not in that price.

The VanEck Semiconductor ETF, ASMH, fell 2.0% on Monday, to $590.99. SK hynix was 4.1% of that fund as of Monday, against 24.1% of CEWY.

On Monday, the day the remarks were reported, the Kospi fell 3.6%. Samsung fell 4.4% and SK hynix fell 4.5%, the Korea Times reported. In New York the same day, Micron Technology, the US memory maker, fell 3.9%, to $989.04, and the Philadelphia Semiconductor Index fell 2.7%. The Nasdaq Composite fell 0.44%, and the S&P 500 was nearly unchanged.

On Tuesday the Kospi opened another 3.1% lower, Yonhap, South Korea's news agency, reported. It pointed to Monday's losses in US technology stocks. At 9:48 a.m. the Korea Exchange halted automated sell orders for five minutes, Yonhap reported, and the index later fell to its low.

SBS, the Seoul broadcaster, said the Kospi had not traded below 6,000 since July 31.

Japan's Nikkei 225 was down 2.0% in afternoon trade, and Taiwan Semiconductor Manufacturing was down 2.0% in Taipei. Hong Kong's Hang Seng Index was little changed. The Kospi fell further, and Samsung and SK hynix fell harder than those moves.