Korea's Kospi sinks 3.65% as chipmakers slide and Apple supplier LG Innotek tumbles

South Korea's benchmark Kospi fell 3.65% on Monday as heavy foreign selling hit the chip giants that dominate the index and Apple supplier LG Innotek plunged after a report that Apple had trimmed component orders for its newest high-end iPhones.

How hard Seoul fell

The Kospi closed at 6,384.24 on Monday, down 241.69 points, or 3.65%, according to Korea Exchange closing data. The smaller Kosdaq fell further, losing 4.83% to 849.19. It was Korea's first trading session since Oct. 8, so Monday's prices were the market's first chance to react to news from the end of last week.

Foreign investors were net sellers of more than 2 trillion won of Kospi shares, while individual investors were net buyers, News1 reported. The selling landed on the chipmakers that carry the most weight in the index: Samsung Electronics and SK Hynix each fell more than 4%. SK Square, the holding company that owns a large stake in SK Hynix, lost 6.29%, and Samsung Electro-Mechanics fell 3.82%.

Korea stood out on a quiet day for the region. Japan's markets were closed for a holiday, and trading was thin across Asia. Taiwan's market eased only modestly.

The iPhone report behind LG Innotek's drop

LG Innotek, which supplies camera modules for Apple's iPhones, fell much harder than the market, losing more than 14%.

Monday was the stock's first chance to trade on a Nikkei Asia report published Oct. 9, a day Korea's market was shut. Citing people familiar with the matter, Nikkei said Apple had told some suppliers to cut production of components for the iPhone 18 Pro and iPhone 18 Pro Max. October component orders for the two models were cut by at least 15% from Apple's original plan, according to the report, which put the range at 15% to 20%. Apple did not immediately respond to requests for comment, and it has not publicly confirmed the cuts.

Nikkei linked the softer demand to price. In the U.S., the iPhone 18 Pro starts at $1,199 and the Pro Max at $1,299, each $100 more than the models they replaced, after a surge in memory chip costs. The report also flagged a complication: Apple is splitting this year's launches, with the standard iPhone 18 not expected until early 2027, which makes year-over-year comparisons of supplier orders less clean. Nikkei said it was unclear whether further reductions would follow in November.

A second problem: the won

Korean analysts point to a separate pressure on LG Innotek that predates the Apple report. A stronger won cuts the value of dollar sales when converted back home, and brokers have been marking down the company's third-quarter profit.

The consensus forecast for LG Innotek's third-quarter operating profit stood at 202.9 billion won as of Oct. 8, according to data provider FnGuide, down 32.8% from 302 billion won a month earlier, Aju Press reported. Yuanta Securities went further, forecasting 78.7 billion won, roughly 38% of that consensus. Yuanta cut its price target to 1.2 million won from 1.4 million won but kept a buy rating, saying the currency hit was concentrated in the optical solutions unit and that costs should ease from the fourth quarter.

Why it matters beyond Seoul

The two stories meet at the memory chip. The same rally in memory prices that has lifted Samsung Electronics and SK Hynix has also made phones more expensive to build, and Nikkei's report suggests some of that cost is now showing up in iPhone demand. Monday's session showed investors selling both the memory makers and the parts suppliers at once.

The test comes quickly. Major U.S. banks open the third-quarter earnings season on Tuesday, and TSMC, the largest maker of advanced chips, is scheduled to report on Thursday. Monday itself is a partial U.S. market holiday for Columbus Day.