Kospi volatility is at an all-time high

Reports of Anthropic awarding a major contract to Samsung sparked a major rally in Seoul, after a week of savage price moves.

Reports that Anthropic is holding discussions with Samsung Electronics (KR:005930) about a major contract to manufacture custom-made, highly advanced, artificial intelligence chips sparked an 8% rally in the memory chip maker's shares trading in Seoul Friday.

The spike in South Korea's largest company triggered a 5.75% rally in the Kospi KR:180721 benchmark and ended a wild, rollercoaster week for the index with a rousing finale.

Just over a month after Samsung participated in the latest funding round for Anthropic, media outlet The Information reported that the Korean company would produce bespoke chips for the artificial intelligence frontier research lab at its next-generation foundry.

The developments gave a major impetus to the Korean market after a week of extreme volatility. The VKospi, Korea's equivalent of Wall Street's VIX VIX index or "fear gauge," has reached levels way in excess of the spike caused by the pandemic of 2020.

Volatility in Korea has reached unprecedented levels in the last few months.

The exaggerated stock market moves owe much to heavy speculation by retail investors using leveraged products to capitalize on the Kospi's record-breaking rally that started in the spring of 2025. Much of the index's gain has been generated by Samsung Electronics and its closest competitor SK Hynix (KR:000660). Together, these two companies represent more than half of the benchmark. To exemplify the intense volatility, shares of SK Hynix jumped almost 11% Friday after a 14% nosedive the day before.

SK Hynix is set to list 17.79 million new shares as American depositary receipts on the Nasdaq Composite on July 10, raising around $29 billion in the process.

Anticipation of those inflows has been credited by some for moving the Korean won (USDKRW) , a currency that has been in decline throughout 2026. Despite the huge current account surplus that South Korea is generating, chiefly through the export of memory chips, the won has lost more than 6% against the dollar DXY this year. On Friday, however, the won took advantage of overall dollar weakness against a basket of currencies and advanced 0.5% on the day.

That current account surplus exceeded $100 billion in the first four months of the year, it has no doubt accelerated in May and June, and Dutch bank ING believes it could end the year around $250 billion.

The weakness in the won then, has been perplexing to many forex analysts. However, capital flight from Korean investors looking to buy shares in the U.S., and international fund managers taking profits amid the Kospi index rally probably explain why the won is sitting near a record low, having halved roughly in the last decade.

Strength in the two Korean memory chip makers and Taiwan Semiconductor Manufacturing Company $(TSM)$ has provided the main impetus behind the impressive year-to-date performance of emerging markets EEM overall. That trio comprises almost a third of MSCI Emerging Markets. The last week, however, has seen a moderation in buying, reflecting a similar trend in the U.S. for the Philadelphia Semiconductor Index SOX. That has shed nearly 10% this week as investors begin to balk at sky-high prices.

In London, Samsung's global depositary receipts (UK:SMSN) were up more than 10% in Friday trading.

-Jules Rimmer

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July 03, 2026 07:49 ET (11:49 GMT)

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