The won strengthens to a two-year high as South Korean chipmakers lose value

The South Korean won reached a two-year high against the dollar, standing at 1,333.30 per dollar on October 12, 2026. However, shares of chip manufacturers like SK Hynix and Samsung traded lower. On the Seoul stock markets, which resumed after a three-day holiday, the KOSPI index fell by more than 3%, resulting in losses of about 162.7 trillion won. The KOSDAQ index also declined by 4.29% and closed at 853.98.

Major sales in the market were driven by foreign investors, who cleared assets in KOSPI, selling their shares worth 458 billion won by 9:55 a.m. The decline was led by two of the largest semiconductor companies: SK Hynix shares fell by 3.81% to 1.617 million won, while Samsung Electronics shares decreased by 3.63% to 252,500 won. Since October 7, both stocks have also lost value, with Samsung down 7.68% and SK Hynix down 7.23%. The decline in Samsung shares occurred despite a preliminary announcement of a record operating profit of 107.4 trillion won for the third quarter, published on October 8. Nevertheless, both companies remain at high positions compared to the beginning of the year: SK Hynix shares have shown a growth of 138.85%, while Samsung shares have increased by 96.5%.

The Seoul economy faces challenges due to rising tensions in the Middle East and concerns about overheating of stocks related to artificial intelligence (AI). Corporate support may also be weakening: Samsung and SK Hynix are winding down share buyback programs totaling 55 trillion won. Analysts believed these buyback operations helped support the KOSPI index, leaving the market without sufficient buying pressure when investors become more cautious. Nevertheless, the rise of the South Korean won is sustained by the broad weakness of the dollar, as stated by Woori Bank economist Gen-won Min. He noted that the won is strengthening alongside the general weakening of the dollar, as the euro, pound, and yen also strengthen amid falling oil prices. Exporters, especially chip manufacturers, should continue to support the won's rate, although these sales on Monday were quite modest. Since the beginning of the year, it has strengthened by 7.7% due to strong exports and corporate dollar sales, lifting it from being one of Asia's worst-performing currencies in the first half of the year. Thus, there is a contradiction: despite the won's support from export flows, it has not prevented the sell-off of shares of the companies behind this support.