Capital flows in the Korean stock market have sharply diverged in 2026 amid the AI boom, with domestic investors accumulating semiconductor stocks while foreign investors execute massive sell-offs. Between January 2 and October 2, Korean retail investors net bought 43.1 trillion won of Samsung Electronics and 39.5 trillion won of SK Hynix, while institutional investors added 11.6 trillion won and 8.5 trillion won respectively. Foreign investors took the opposite stance, cumulatively net selling 84.6 trillion won of Samsung Electronics and 82.5 trillion won of SK Hynix during the same period. The offshore selling extended beyond chipmakers to include Hyundai Motor and SK Square. Analysts attribute the divergence to rising U.S. Treasury yields approaching 5%, which has shifted focus toward sectors with proven earnings capability driven by AI infrastructure investment.