A sharp selloff hit U.S. semiconductor stocks and high-flying memory names on Tuesday, with shares of SanDisk Corp. (NASDAQ:SNDK) and Micron Technology Inc. (NASDAQ:MU) plunging double digits. The slump came after a top South Korean official floated a proposal to redistribute the AI profits of Samsung Electronics Co. and SK Hynix Inc. directly to the Asian nation’s citizens.
The proposal was a Facebook post. The market response was a six-figure global repricing.
A Hurricane Hits Memory Stocks, Semis After Relentless Rally
The iShares MSCI South Korea ETF (NYSE:EWY) fell 9.8% by 1 p.m. trading in New York, on pace for its worst day since March 3, 2026.
The Roundhill Memory ETF (NASDAQ:DRAM) — which had rallied over 90% in slightly more than a month — collapsed 11.8%, its worst day since the fund launched in April 2026.
The iShares Semiconductor ETF (NASDAQ:SOXX) shed 6.9%, the steepest one-day drop since April 10, 2025, when the post-Liberation Day tariff selloff cratered chip names.
The damage inside the chip complex was concentrated in memory and adjacent storage names.
SanDisk Corp. fell 11.12%, Micron Technology Inc. dropped 10.30%, Western Digital Corp. (NASDAQ:WDC) lost 9.30%, and Seagate Technology Holdings PLC (NASDAQ:STX) fell 7.77%.
Broader semiconductor names linked to the AI-infrastructure trade also suffered heavy losses: Qualcomm Inc. (NASDAQ:QCOM) tumbled 14.87%, Credo Technology Group Holding Ltd. (NASDAQ:CRDO) fell 12.64%, and Intel Corp. (NASDAQ:INTC) dropped 10.97%.
What Triggered Tuesday’s Chip Rout
The catalyst came from Kim Yong-beom, chief of the South Korean Presidential Policy Office and the most influential economic voice in the Lee Jae-myung administration after the president himself.
In a Facebook post late Monday, Kim argued that Korea’s strategic position in the global AI infrastructure supply chain is producing a structural boom in chipmaker profits — and that a slice of the resulting excess tax revenue should be redistributed to citizens through what he called a “national dividend” or “citizen dividend.”
He pointed to Norway’s sovereign wealth fund as a model rather than Alaska’s Permanent Fund Dividend or Andrew Yang’s universal basic income proposal.
The KOSPI, which had touched a record 7,999.67 earlier in the session and was a single point away from breaking 8,000 for the first time in history, plunged as much as 5.1% in minutes, wiping out roughly $300 billion in market capitalization. Samsung and SK Hynix led the decline.
Foreign investors dumped an estimated $3.8 billion of Korean shares in a single session.
Kim later clarified that he was referring to excess tax revenue generated by AI-era growth, not a direct windfall levy on corporate profits. A Blue House official told Bloomberg News that the remarks reflected Kim’s personal opinion and were not the subject of formal policy discussions. Samsung and SK Hynix recouped much of their early losses.
The KOSPI closed down 2.29%.
The retracement in Seoul did not save US-listed memory names. It was no longer about how much Samsung and SK Hynix would pay in Korean taxes.
It was about whether the political logic Kim had introduced — that the AI infrastructure buildout creates excess profits that belong to society — could spread.
The Bigger Question: Who Owns The AI Profits?
The AI infrastructure boom has produced extreme corporate profit concentration.
Samsung alone is on pace to post 330 trillion won ($220 billion) in operating profit this year, which would rank it second only to Nvidia Corp. (NASDAQ:NVDA) among the world’s most profitable companies — ahead of Apple Inc. (NASDAQ:AAPL) and Alphabet Inc. (NASDAQ:GOOGL).
SK Hynix is forecast to deliver 239 trillion won in 2026 operating profit. Those numbers are an order of magnitude larger than the chipmakers’ historical baselines.
That kind of profit concentration creates political gravity.
Kim’s proposal is the first time a senior official inside a major AI-supplier economy has publicly asked the question: do these profits belong entirely to shareholders, or does the public infrastructure that enabled them entitle citizens to a share?
The episode also exposed how fast positioning has become. The DRAM ETF was already up roughly 100% in 2026 before Tuesday’s session and memory names had gone vertical.
SanDisk had surged more than 4,000% since its early-2025 spinoff debut.
When a single Facebook post can wipe out double-digit percentages from stocks priced for memory perfection, the lesson is less about Korea than about how leveraged the trade had become to the assumption that AI memory profits would flow uninterrupted to private shareholders.
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