South Korean stocks slide as DeepSeek model stokes memory chip demand fears

South Korean stocks fell as investors worried about two things: demand for memory chips, and how much longer the money for AI keeps flowing. The biggest casualties were the country’s chip giants, Samsung Electronics and SK Hynix. The trigger came from a Chinese AI lab that says it can do more with less. A model that eats less memory The spark was DeepSeek’s V4.1-Flash model, released on September 10, 2026. Its pitch was efficiency, specifically in high-bandwidth memory, or HBM. HBM is the premium memory stacked next to AI accelerators so they can be fed data fast. Samsung and SK Hynix together dominate global supply. DeepSeek claims V4.1-Flash needs only a quarter of the HBM its predecessors required during inference. That is the stage where a trained model answers user requests. It also claims the model needs one-eighth of the SSD storage. The technical headline is roughly 890 bytes per token for the model’s global KV cache. A KV cache is the working memory a model holds while it generates a response. DeepSeek credits techniques including CSA2 compression and FP4 quantization. Quantization stores numbers with fewer bits, trading a little precision for a lot of space. How the marke...