South Korea's benchmark KOSPI extended its slide on Friday, reaching a more-than-two-week low as investors sold off semiconductor stocks on signs that demand for memory used in artificial intelligence workloads could be curbed.
The KOSPI fell as much as 3% to 5,220.10 points, marking its weakest reading since March 9. The index was also on track to post a decline of over 8% for the week.
Two of the index's largest components, Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660), each dropped more than 4% on the session, deepening losses carried over from the prior trading day. Both firms were poised to end the week down in excess of 10% and ranked among the heaviest weightings dragging on the KOSPI.
Shares of the South Korean memory makers moved lower after an overnight rout among U.S. memory-chip companies. Western Digital Corporation (NASDAQ:WDC), Seagate Technology PLC (NASDAQ:STX) and Micron Technology Inc (NASDAQ:MU) each tumbled, with losses ranging from about 6.9% to 8.4%.
The declines followed a disclosure from Google (NASDAQ:GOOGL) researchers who unveiled TurboQuant, a compression algorithm they said could substantially reduce the working memory requirements of AI models without harming performance. Market participants noted that if such an approach is feasible for broad deployment, it could slow demand growth for advanced memory chips that are used to support large AI workloads.
Samsung and SK Hynix are among the producers of the most advanced memory components on the market and had been beneficiaries of tight supply conditions driven by elevated AI demand. Memory prices climbed steeply over the past two quarters and were expected to be buoyed by AI-driven needs, a dynamic now called into question by the TurboQuant announcement. Google said it will present TurboQuant at the ICLR 2026 conference in April.
Beyond the memory segment, semiconductor shares more broadly were pressured after U.S. chip names also sold off. NVIDIA Corporation (NASDAQ:NVDA) slipped more than 4% following the unveiling of AI server chips by Arm, a development seen as potential competition for NVIDIA in the AI infrastructure market.
The market reaction on Friday underscores investor sensitivity to developments that could alter the hardware requirements underpinning AI deployment. For now, losses were concentrated among memory specialists and other chipmakers tied to AI infrastructure, leaving the broader KOSPI notably lower amid the sector pullback.