KOSPI Plunges 8.95% on July 13, Triggers Circuit Breaker Amid AI Bubble Debate

According to the Economist, South Korea's KOSPI index fell 8.95% on July 13, triggering a circuit breaker—the seventh trading halt this year. The selloff reflects market concerns about peak artificial intelligence investment and potential oversupply in high-bandwidth memory (HBM) and DRAM chips, with semiconductor stocks including Samsung Electronics and SK Hynix bearing the brunt as profit-taking accelerated.

Despite the volatility, domestic and international analysts argue the current correction reflects overshooting expectations rather than fundamentals deterioration. The KOSPI's 12-month forward PER stands at 6.35x, below October 2008 financial crisis levels, and key signals of an AI infrastructure slowdown—such as hyperscaler capex cuts or reduced HBM contracts—have yet to materialize, suggesting the AI investment cycle remains in early stages.