What happened
A March 5, 2026 commentary projects South Korea's KOSPI index reaching 6,000, driven by foreign investment in AI hardware firms like Samsung Electronics and SK Hynix; foreign holdings topped $1.1 trillion by January 2026. It then describes a hypothetical geopolitical shock: US and Israeli airstrikes in Iran, triggering extreme KOSPI volatility, including a projected 7% drop, a 12% record daily selloff, then a 12% rally, alongside a hypothetical record $4.8 billion one-day foreign share outflow.
Why it matters
AI hardware supply chain vulnerability emerges from rapid shifts in foreign capital flows and geopolitical instability. Investors and procurement teams evaluating long-term commitments to South Korean AI component suppliers must factor in such external risks, exemplified by the hypothetical $4.8 billion one-day outflow. The South Korean government's planned 100 trillion won ($68 billion) market stabilisation fund deployment in this scenario highlights the challenge of taming 'hot money flows', impacting market predictability for AI infrastructure providers.
