Level 1 — Absolute Beginner
Stock prices in South Korea fell a lot on July 16. Two big chip companies, Samsung and SK Hynix, lost the most money.
These two companies make computer chips. Many of these chips are used to build artificial intelligence, or AI.
Some investors worry that AI chip prices have gone up too fast. They think the prices may be too high for what the companies actually earn.
Samsung and SK Hynix are now a very big part of South Korea's whole stock market. When their prices fall, the whole market falls too.
- stock
- A small piece of a company that people can buy and sell
- chip (computer)
- A small electronic part used inside computers and machines
- artificial intelligence
- Computer technology that can perform tasks that normally need human thinking
- investor
- A person who puts money into stocks hoping to make more money
- worry (verb)
- To feel nervous or afraid about something
- earn (money)
- To receive money for work or business
- market (stock market)
- The place where stocks are bought and sold
- fall (of prices)
- To become lower in value
Level 2 — Elementary
South Korea's main stock index, the Kospi, slumped as much as 7.3% on July 16, led lower by chipmakers Samsung Electronics and SK Hynix.
Both companies produce memory chips that power artificial intelligence systems around the world, and their stock prices have swung wildly over the past two weeks.
On July 2, Samsung and SK Hynix together lost about $290 billion in value in a single trading day. On July 7, both companies fell again by 8.7% even though Samsung had just reported a nineteenfold jump in quarterly operating profit.
Samsung and SK Hynix now make up roughly half of the Kospi's total weight, up from about a quarter at the end of last year, so sharp swings in their share prices can move the entire South Korean market.
- index (stock index)
- A number that tracks the overall value of a group of stocks
- slump (verb)
- To fall suddenly and sharply in value
- memory chip
- A computer chip that stores digital information
- swing (verb, prices)
- To move up and down sharply
- trading day
- A day during which a stock market is open for buying and selling
- operating profit
- The money a company earns from its normal business activities
- nineteenfold
- Nineteen times as large
- weight (of a stock in an index)
- The share of an index's total value that one stock represents
Level 3 — Intermediate
South Korea's benchmark Kospi index slumped as much as 7.3% on July 16, as a renewed semiconductor rout dragged down SK Hynix and Samsung Electronics ahead of a market holiday in Seoul on Friday.
The decline extends a volatile stretch for the two memory chipmakers, whose shares have swung sharply as investors reassess how much of the artificial intelligence boom is already priced into semiconductor valuations.
On July 2, Samsung and SK Hynix shed a combined $290 billion in value in a single session. Days later, on July 7, both stocks fell again by 8.7% even after Samsung reported a nineteenfold surge in quarterly operating income to 89.4 trillion won, roughly $58.7 billion.
Because Samsung and SK Hynix now account for roughly half of the Kospi's total weight, up from about a quarter at the end of last year, sharp moves in either stock can drag the broader index with it before the market's other nine hundred or so listed companies have much say.
- benchmark index
- A widely recognized index used as a standard to measure market performance
- rout (noun)
- A sudden, sharp decline in a market or sector
- volatile
- Likely to change quickly and unpredictably
- reassess
- To review and reconsider a situation or judgment
- priced into (a stock)
- Already reflected in a stock's current price
- shed (value)
- To lose an amount of value
- session (trading session)
- A period during which a market is open for trading
- account for (a share)
- To represent or make up a certain proportion of something
Level 4 — Advanced
South Korea's benchmark Kospi index slumped as much as 7.3% on July 16, as a renewed semiconductor rout dragged regional equities lower and chipmakers SK Hynix and Samsung Electronics led the retreat ahead of a market holiday in Seoul on Friday.
The decline extends a turbulent stretch for the two memory chip heavyweights, whose valuations have become a proxy for broader investor sentiment on whether the artificial intelligence buildout can sustain the lofty prices already baked into semiconductor stocks.
The pattern has repeated itself with striking regularity: on July 2, the pair shed a combined $290 billion in a single session, and on July 7 both fell 8.7% apiece even as Samsung disclosed a nineteenfold surge in quarterly operating income, to 89.4 trillion won, or roughly $58.7 billion, evidence that robust earnings alone are no longer sufficient to satisfy a market that, in the words of one analyst, appears to have bought the AI narrative months before the underlying results arrived.
The stakes for the broader index have only grown, since Samsung and SK Hynix now constitute roughly half of the Kospi's total weight, up from about a quarter at the close of last year, meaning a sharp move in either name can overwhelm the combined influence of the index's remaining nine hundred or so constituents.
- retreat (noun, market)
- A sharp pullback or decline in prices
- turbulent
- Characterized by conflict, confusion, or sudden change
- proxy (for sentiment)
- Something that serves as a substitute measure for something else
- buildout
- The large-scale construction or expansion of infrastructure or capacity
- lofty (valuations)
- Very high, especially unreasonably so
- baked into (a price)
- Already factored into or reflected in a price
- disclose
- To make new or secret information known
- constituent (of an index)
- One of the individual stocks that make up a market index
Talk about this article with KatePractice this story's vocabulary in a real spoken conversation with your AI tutor