Why Is South Korea’s Won Rising While Its Chip Stocks Collapse?

South Korea’s won hit its strongest level against the dollar in more than 10 months on Wednesday. The currency strengthened past the 1,400 mark, a level last seen in late September 2025.

A booming semiconductor industry is helping drive the currency’s recovery, even as the same sector comes under heavy selling pressure in South Korean equities.

Chip Dollars Reach the Currency Market

The won has gained 10.8% since early July. The currency traded as weak as 1,557.9 per dollar on July 2 before strengthening to 1,396.6 at press time.

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Export earnings explain the move. Korea shipped $98.89 billion of goods in July, up 63% from a year earlier. Semiconductor exports rose 179% to $41 billion.

Those dollars are now reaching the domestic market. SK Hynix raised $26.5 billion through a US depositary receipt listing. The firm said that it will use the funds from the listing to fund projects in the country.

Chip Stocks Pull the Other Way

The picture is markedly different in South Korea’s stock market. The same AI-driven semiconductor boom that is boosting export earnings has also left chip stocks vulnerable to sharp swings in investor sentiment.

The KOSPI has experienced significant volatility in recent months. The index plunged 22% in July, its steepest monthly decline since the global financial crisis. 

The selling pressure continued on Wednesday, prompting the Korea Exchange to activate a sell-side trading curb. At press time, the KOSPI stood at 6,490.63, down 5.52%.

Chipmakers led the decline. Samsung Electronics fell 7.64% to 248,000 won, while SK Hynix dropped 9.09% to 1,511,000 won. Together, the two companies account for roughly half of the KOSPI’s weight.

The sell-off followed a sharp overnight decline in US semiconductor stocks. SK Hynix’s depositary receipts fell 9.2% in New York, while Micron Technology declined 7.02%.

The divergence highlights an unusual dynamic in South Korea’s markets. The semiconductor boom is supporting the won through stronger export earnings and dollar inflows, while concerns over the global technology sector are weighing heavily on the country’s chip-heavy stock market.

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