Google's TurboQuant Sends South Korean Chip Stocks Tumbling Amid AI Memory Demand Fears

South Korean equities took a sharp hit Friday as mounting concerns over reduced artificial intelligence memory demand dragged the KOSPI index to its lowest point in more than two weeks. The benchmark fell nearly 3% to 5,220.10 points — a level not seen since March 9 — and was on track to shed over 8% for the week, marking one of its worst weekly performances in recent memory.

At the center of the sell-off were two of South Korea's largest chipmakers. Samsung Electronics and SK Hynix each dropped more than 4%, extending steep losses from the previous session and heading toward weekly declines exceeding 10%. Both stocks ranked among the heaviest drags on the broader index.

The catalyst behind the market turbulence was Google's unveiling of TurboQuant, a newly developed data compression algorithm designed to significantly reduce the working memory requirements of AI systems — without sacrificing performance. If widely adopted, the technology could meaningfully dampen demand for the high-bandwidth memory chips that have driven explosive revenue growth for Samsung and SK Hynix over the past year.

The South Korean losses tracked a broader overnight decline in U.S. memory stocks, with Micron Technology, Western Digital, and Seagate each tumbling between 6.9% and 8.4%. AI chip giant Nvidia also slid more than 4% after Arm announced its own line of AI server chips, introducing a potential new competitor in the high-performance computing space.

Samsung and SK Hynix have been significant beneficiaries of the AI-driven memory chip boom, with prices climbing sharply over the past two quarters on the back of tight supply and surging demand from data centers. Google is set to formally present TurboQuant at the ICLR 2026 conference in April, an event the chip industry will be watching closely for further details on the algorithm's real-world viability.