South Korea's KOSPI plunged more than 5% intraday, triggering a sell sidecar — a temporary suspension of program sell orders — on the main board. Downward pressure on the domestic market is mounting as concerns spread over expanded supply following a Chinese chipmaker's plan to mass-produce next-generation DRAM.
The sell sidecar was triggered on the main board at 9:47:58 a.m. on the 13th, according to the Korea Exchange. It was the first sell sidecar on the KOSPI market in about two months, since Aug. 19.
A sell sidecar is triggered when KOSPI 200 futures fall 5% or more from the previous session and stay there for at least one minute. Program sell orders on the main board are suspended for five minutes from that point. KOSPI 200 futures stood at 955.02 when the measure kicked in, down 51.20 points, or 5.08%, from the previous session's reference price of 1006.22.
As of 9:49 a.m., the KOSPI was at 6,102.67, down 281.57 points, or 4.41%, from the previous session. The index opened 3.10% lower at 6,186.08 and then widened its losses, slipping below the 6,100 line intraday.
The decline is attributed to concerns over expanded supply in the global memory market after Changxin Memory Technologies (CXMT), China's largest DRAM maker, said it would unveil next-generation DRAM products for servers. Chip stocks were also weak on Wall Street overnight, with the Philadelphia Semiconductor Index tumbling 2.67%.
Selling has continued in the domestic market, led by Samsung Electronics and SK hynix. Both stocks fell more than 4% the previous day and were down roughly 5% to 6% in early trading on the 13th, driving the index lower.