KOSPI Falls Over 1% Due to Concerns Over Google’s TurboQuant Algorithm

The KOSPI index opened lower on March 26, 2026, falling by more than 1% due to simultaneous selling by foreign and institutional investors. This decline comes on the heels of concerns about reduced demand for memory chips following Google’s recent announcement of its TurboQuant algorithm.

At 9:03 AM, the KOSPI was trading at 5,585.46, down 56.75 points or 1.01% from the previous close. The market continued to drop, with the index showing a decrease of 84.48 points or 1.50% by 9:12 AM, settling at 5,557.73.

Foreign and institutional investors sold a combined 4.4 trillion won ($2.5 billion), with foreign investors offloading 2.89 trillion won and institutions selling 1.53 trillion won. Meanwhile, individual investors were net buyers, purchasing 4.25 trillion won worth of stocks.

Among the major stocks, Samsung Electronics experienced a 2.86% drop, trading at 183,600 won, and SK Hynix fell by 3.62% to 959,000 won. Other notable declines included Hyundai Motor, down 1.40%, and LG Energy Solution, down 1.27%. On a more positive note, Samsung Biologics rose by 1.32%.

The KOSDAQ index, on the other hand, showed resilience, rising by 7.12 points or 0.61% to reach 1,166.67. Individual investors were particularly active on the KOSDAQ, with net purchases amounting to 173.8 billion won, even though foreign and institutional investors sold 862 billion won and 697 billion won, respectively.

Investors’ anxiety is largely attributed to Google’s TurboQuant algorithm announcement, which was revealed on March 24. This advanced quantization algorithm allows for large-scale compression of data used by large language models (LLMs), potentially decreasing the demand for memory chips.

According to Google, the TurboQuant algorithm can reduce the key-value memory size by at least six times without degrading model accuracy. This has raised concerns about the future demand for memory chips, particularly impacting companies like Micron Technology and SanDisk, whose stocks fell by 3.4% and 3.5%, respectively, on March 25.

Gemma and Mistral, two open-source models, were tested using the TurboQuant algorithm, achieving an eightfold performance increase over unquantized keys on NVIDIA's H100 GPU accelerators. This performance boost has led to speculation that the efficiency of LLMs may lessen the need for memory resources.

Han Ji-young, a researcher at Kiwoom Securities, commented, "The TurboQuant algorithm’s release has created a perception that less memory may be needed for processing longer contexts. This could lead to a slowdown of memory demand, impacting major memory companies’ stock prices like Micron and SanDisk." He added that the algorithm is still at the research stage, and its commercialization will require time.

Meanwhile, the New York stock market had a contrasting performance, closing higher on March 25 due to easing geopolitical tensions concerning the Middle East. The Dow Jones, S&P 500, and NASDAQ indices rose by 0.66%, 0.54%, and 0.77%, respectively. This positive sentiment was fueled by reports that the U.S. proposed a 15-point peace plan to Iran, which included sanctions relief and the abandonment of its nuclear program.

International oil prices also fell, with Brent crude and West Texas Intermediate (WTI) futures dropping by 2.2%, alleviating inflation concerns stemming from rising energy costs.

Back on the domestic front, the semiconductor sector remains under pressure. On March 26, at 9:06 AM, Samsung Electronics was trading at 184,100 won, a decrease of 2.59%, and SK Hynix was down 3.42% at 96,100 won. The downward trend is attributed to the TurboQuant risk that emerged from the New York stock market.

Han Ji-young noted, "The TurboQuant algorithm, which can handle longer contexts with less memory, has created a negative perception that memory demand may not grow significantly with the expansion of AI services. Nonetheless, this issue is seen more of a short-term variable, and actual commercialization will take time." He emphasized that the TurboQuant announcement may have also served to justify profit-taking after the recent surge of memory stocks earlier this year.

Investors are now watching closely how these developments will influence the semiconductor market and the broader stock indices. The dynamics surrounding TurboQuant could redefine expectations for memory chip demand, prompting a reevaluation of investment strategies across the sector.

With the market reacting to these technological advancements, the upcoming days will likely be telling for both domestic and international semiconductor stocks, particularly how they respond to the pressures posed by innovations like TurboQuant.