Korea’s retail stock rout sends chip jitters across Asia
Goldman said 1.2 million South Korean retail traders faced margin calls as the selloff hit semiconductor names from Tokyo to Taipei.
By Frankie Delgado · News Reporter
3 min read
South Korea’s retail investors have been whacked by a market selloff severe enough to trigger margin calls for 1.2 million accounts, according to a Goldman Sachs desk note cited by MarketWatch.
Ioannis Blekos, a Goldman Sachs trader, told clients Thursday that about 350,000 retail accounts had been liquidated this week during the Korean market slide. The 1.2 million traders caught by margin calls amount to more than 3% of South Korea’s adult population, underlining how widely leverage had spread among the country’s small investors, often nicknamed “ants.”
Korean markets were shut Friday for the Constitution Day holiday, but the pressure did not stay home. Semiconductor shares across Asia kept sliding as investors pulled back from some of the year’s hottest trades.
Chip stocks take the hit
In Japan, Kioxia Holdings fell 16%, according to MarketWatch market data. The memory-chip company has now lost about half its value over the past month, even after a powerful run earlier in 2026.
Other Japanese chip-related names also dropped. MarketWatch listed Ibiden down 9.88%, Tokyo Electron off 8.17% and Sumco lower by 15.17%.
Taiwan Semiconductor Manufacturing Co. also joined the retreat. MarketWatch reported that TSMC fell 7% even after the company delivered stronger-than-expected second-quarter results and raised its outlook Thursday.
The selling followed a sharp move in the U.S. semiconductor gauge. The Philadelphia Semiconductor Index dropped 4% Thursday, taking its decline from its 2026 high to 19%, MarketWatch reported, putting it close to the 20% fall commonly used to mark a technical bear market.
Big gains make for nervous exits
The pullback comes after steep gains in several major chip shares. MarketWatch reported that Kioxia remained up 359% in 2026, while TSMC was ahead 44%, SK Hynix was up 172% and Samsung had gained 112%.
MarketWatch also reported that earnings forecasts were still rising as share prices fell, making valuations look more attractive for many semiconductor names. Recent results from ASML and Micron were described as strong, and chip makers have said supply is not expected to meet demand for the foreseeable future.
Market commentator Stephen Innes, writing in a Substack post titled “Dark Side of the Boom,” argued that TSMC’s fall despite good news showed investors were reacting to crowded positioning rather than fresh company information. He also said South Korea showed how leverage, margin calls and volatility can turn a regular correction into a forced-selling spiral.
Fresh money still appears
There were signs that some investors were buying into the weakness. Citi’s David Chew said in weekly fund-flow notes published Friday that Korea exchange-traded funds attracted $6.4 billion this week, while Taiwan ETFs pulled in $2.8 billion.
Chew also said Korea saw a $500 million international inflow over the past week after months of heavy outflows, calling it an encouraging reversal, according to MarketWatch.
Investor interest in the chip sector has not disappeared elsewhere in Asia. The Economic Times reported that Chinese semiconductor company CXMT’s $8.6 billion initial public offering was 250 times oversubscribed.
South Korean regulators are also trying to cool the retail frenzy. The Financial Services Commission announced steps to triple the minimum deposit required to open a brokerage account and to bar new leveraged products tied to benchmark heavyweights, according to MarketWatch.
This story draws on original reporting from MarketWatch.