The KOSPI index has recently fallen sharply, and both investors and analysts are pointing to “semiconductor price inflation” as a key factor behind the decline. In a report released on the 19th, researcher He Jae-hwan of the Securities Research Institute said that “the prices of semiconductor‑related companies have risen too much, creating negative pressure across the entire KOSPI.”
He noted that over the past two days, the KOSPI had dropped about 21 % in a few trading sessions, calling this a sharp adjustment rather than a normal one. He added that since the 1980s, the biggest declines have been in December 1997 and October 2008, with only one more recent fall in March 2020; these episodes were not merely due to price rises but were the result of excessive price inflation. He also stressed that even if semiconductor firms perform well, their growth prospects could turn negative.
He cited examples where prices of semiconductors and related industries have risen by 25–60 % or more, noting that at the point when price inflation spiked, the market fell. In domestic markets he observed that price rises in key sectors often occur two to three times larger than normal, and this tends to hurt both the economy and the stock market. He mentioned patterns such as China’s 2006‑2008 semiconductor and raw‑material industries, 2011‑2012 automotive (auto‑parts, chemicals), and 2021‑2022 battery manufacturing, which may show similar patterns.
Finally, He warned that if prices fall too much, the risk can be mitigated through hedging, but as long as price inflation remains high, the risk stays. He added that industries that had previously moved lower or in the opposite direction—such as media and entertainment, hotels and leisure, health care, and even some KOSDAQ firms—also face price‑inflation risk when the market falls.