KOSPI Slips Below the 6,800 Line, But the Won Holds Its Ground Alone

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Tariff Threat Widens to Finished Products, Hitting Korea's Two Chip Giants Head-On

The KOSPI closed at 6,788.88, down 123.49 points, or 1.79%, from the previous session. That marked a sharp reversal from Wall Street's broad gains overnight, which had been driven by Nvidia's surge — instead, reports that Washington is weighing a 'second round' of semiconductor tariffs weighed heavily on investor sentiment in Seoul.

Politico, the US political news outlet, reported that the Trump administration is considering extending steep tariffs beyond semiconductors themselves to finished products that contain chips, including laptops, game consoles, and data center servers. Commerce Secretary Howard Lutnick said he favors a quota-style structure that would cap tariff-free imports based on each company's committed US production capacity, and there were also indications that the tariff exemptions granted in January for data centers, R&D, startups, and consumer electronics may no longer hold. On top of that, the White House reaffirmed that reshoring semiconductor manufacturing remains a top priority, and selling pressure concentrated on Korea's two chip heavyweights, Samsung Electronics and SK hynix.

Funding the PolyPeptide Group Acquisition: The Market Read It as a Massive Share Issuance

Samsung Biologics fell 6.78% on the day, the steepest decline among large-cap stocks on the main board (KOSPI). Shares were pressured by a rights offering worth roughly 3.0009 trillion won disclosed before the market open, aimed at funding the acquisition of Swiss peptide contract development and manufacturing organization (CDMO) PolyPeptide Group and the expansion of its second bio campus in Songdo, Incheon.

Of the funds raised, about 2.7062 trillion won will go toward the PolyPeptide Group acquisition — announced in July as the largest M&A deal in Korea's pharmaceutical and bio industry to date — while the remaining 294.8 billion won will fund production facility expansion. The company plans to issue 2.27 million new shares at a planned price of 1,322,000 won, a 15% discount, with the offering equal to just 4.904% of shares outstanding. The company argued that dilution concerns were therefore limited, but the market instead focused on the roughly 3 trillion won funding burden and questions over how efficiently the capital would be deployed, driving the sell-off.

Nvidia's Rally Didn't Reach Seoul

Overnight on Wall Street, the Nasdaq Composite rose 1.57%, while the S&P 500 and Dow Jones Industrial Average gained 0.72% and 0.20%, respectively. Korean equities, however, failed to follow that momentum. On the main board, foreign investors sold a net 1.7561 trillion won and institutions sold a net 283.9 billion won, dragging the index lower, while individual investors bought a net 423.7 billion won, only partially cushioning the decline. The KOSPI 200 Volatility Index (VKOSPI) fell 5.53% to close at 50.08 — still elevated, but somewhat calmer than the previous session.

Notably, the won/dollar exchange rate fell 0.35% to close at 1,375.67 won per dollar, meaning the won actually strengthened. While domestic equities — a risk asset — sold off on tariff concerns, the currency market moved in the opposite direction.

Chips and Robotics Correct While Kakao and Naver Extend Their Rebound

Performance diverged sharply by sector. The KOSDAQ (Korea's tech-heavy secondary board, similar to Nasdaq) index swung between gains and losses before closing modestly higher, up 0.09% at 838.41. Individual investors bought a net 98.0 billion won, while foreigners and institutions sold a net 92.9 billion won and 3.4 billion won, respectively. Within the index itself, results were mixed: Alteogen (+2.73%) and EcoPro BM (+0.17%) advanced, while EcoPro (-1.96%) and Rainbow Robotics (-3.18%) declined.

Naver (+1.85%) and Kakao (+2.36%), by contrast, rose even as large-cap chip and bio stocks corrected. Both names have been on a rebound since early July after posting second-quarter earnings that beat market consensus. Kakao in particular reported roughly 2.0985 trillion won in second-quarter revenue and 277 billion won in operating profit, topping most brokerage forecasts. The fact that the platform sector isn't directly exposed to tariff risk is seen as another factor behind its relative strength today.

Chips and Robotics Correct, While Battery Stocks Stayed Relatively Calm

SK hynix declined more than 4% on the tariff review news, the most sensitive reaction among large-caps today, while Samsung Biologics plunged more than 6% in the wake of its rights offering. Growth-oriented Rainbow Robotics also fell more than 3% amid risk-off sentiment, but LG Energy Solution limited its decline to just 0.13%, holding relatively steady, and Naver rose on the back of earnings momentum, bucking the broader trend.

Chip Giants Tumble While Kakao and Alteogen Stand Out With Gains

Samsung Electronics (-3.38%) and SK hynix (-4.45%) both fell sharply on news that the US is weighing tariffs on finished products containing semiconductors, while Samsung Biologics (-6.78%) posted the steepest decline among large-caps under the weight of its roughly 3 trillion won rights offering. Rainbow Robotics (-3.18%) and EcoPro (-1.96%) also weakened amid risk-off sentiment. Kakao (+2.36%), Naver (+1.85%), and Alteogen (+2.73%), on the other hand, closed higher, helped by their limited direct exposure to the tariff issue.

Warsh's First Jackson Hole Message and the Fate of Tariffs: Key Variables Remain

The first question is how specific a signal Fed Chair Kevin Warsh's Jackson Hole keynote will give on inflation and the path of interest rates. At the same time, whether the Trump administration's proposed tariffs on finished products containing semiconductors actually materialize — and how their scope and timing are finalized — will likely determine the direction of Korea's large-cap chipmakers. For Samsung Biologics, the timing of the PolyPeptide Group acquisition's completion via its rights offering, and how the market judges the efficiency of that capital deployment, are also worth watching going forward.

Two Threads Still Unfolding After the Closing Bell

사진: Homa Appliances / Unsplash

The global pure-play foundry market grew 29% year-over-year in the second quarter, driven by rising AI chip orders and capacity reallocation. With supply-demand imbalances persisting across both leading-edge and mature nodes, the benefits of that growth have flowed disproportionately to the top players.

TSMC held onto the top spot with a 73% market share, supported by its 2-nanometer mass production and expanded 3-nanometer capacity. Supply shortages in mature nodes and advanced packaging are also cited as factors behind TSMC's growing share.

Samsung Electronics held onto second place with a 7% share in the second quarter, but that figure has been stuck at roughly the same level since the third quarter of last year. The company is reportedly focused on improving yields at its 2-nanometer SF2 process. Separate from the semiconductor tariff issue, the pace of yield improvement and Samsung's ability to win new customers remain the key indicators for whether its foundry business can stage a medium- to long-term recovery.

사진: Vitaly Gariev / Unsplash

The government finalized its 'Youth Employment Recovery Plan' at an emergency economic headquarters meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol. The plan raises support under the Youth Job Leap Incentive from a maximum of 7.2 million won to 18 million won over two years, and sets a goal of creating more than 300,000 job and startup opportunities by 2030.

For young people who take jobs at small and mid-sized companies outside the greater Seoul area, the plan is designed to provide combined support — including the incentive payment, contributions to a youth future savings account, and a culture and arts pass — worth up to roughly 1 million won per month over two years. The income tax reduction period will also be extended on a regional basis, from five years up to a maximum of ten years.

The plan reflects concern over prolonged weakness in youth employment. The employment rate for those aged 20 to 24 has fallen from 46.0% in 2022 to 41.3% in the second quarter of this year. On the same day, the government also unveiled plans to raise next year's youth budget by 53.5%, from 28.2 trillion won this year to 43.3 trillion won, a marked expansion in fiscal spending aimed at young people.

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