The MSCI emerging-market equities index dropped over 2% on June 23, marking its steepest single-day decline since May 15. The culprit: a brutal tech selloff that hit South Korean semiconductor stocks with particular ferocity, sending shockwaves across Asia and into global indices.

Samsung Electronics and SK Hynix, the two memory chip titans that anchor South Korea’s stock market, saw their shares plummet more than 12% in a single session. The Kospi index fell somewhere between 5% and 10%.

Broadcom’s forecast lit the fuse

The trigger came from an unlikely source: Broadcom. The US chipmaker issued a cautious outlook on AI-chip demand earlier in the week, and that single forecast revision was enough to unravel months of accumulated optimism in semiconductor names worldwide.

The selling wasn’t confined to Seoul. The Nasdaq and other major indices felt the pressure from June 23 through June 25, as investors globally reassessed whether AI-adjacent valuations had gotten ahead of reality.

Samsung and SK Hynix accounted for the majority of the Kospi’s decline, which makes sense when you consider how heavily weighted those two companies are in the index.

South Korean regulators added fuel

South Korean regulators introduced concerns about leveraged ETFs around the same time. This compounded the volatility, creating a feedback loop where falling prices triggered margin-related selling, which drove prices lower still.

What this means for investors

South Korea isn’t just any emerging market. It’s the world’s dominant producer of memory chips, and its stock market is essentially a leveraged bet on global semiconductor demand. The Kospi index had roughly doubled year-to-date before the selloff, driven by surging demand for memory chips attributed to AI applications.

A 12% single-day decline in companies the size of Samsung and SK Hynix represents tens of billions of dollars in market value evaporating in hours.

The tech selloff that hammered emerging markets showed no notable spillover into digital asset markets, according to the research coverage, which noted no direct references to cryptocurrencies or digital assets in relation to this event.