KOSPI Surges Past 3,500 on Semiconductor cycle Optimism, Driven by DRAM, NAND, and AI Demand
Seoul, South Korea – South Korea’s benchmark KOSPI index has broken through the 3,500-point threshold, fueled by a resurgence in the semiconductor industry and bolstered by significant investment from tech giants like OpenAI. The rally marks a stark contrast to last year’s downturn,when Samsung Electronics’ share price plummeted from 90,000 won.
The current upswing is attributed to increasing demand for DRAM and NAND memory, directly impacting companies like Samsung Electronics and SK Hynix. Further accelerating this trend is OpenAI’s recent partnership with both firms, signaling a need for 900,000 High Bandwidth Memory (HBM) units – more then double current production capacity. market analysts believe the KOSPI is now entering the initial phase of a “semiconductor cycle,” anticipating continued gains.
“Samsung Electronics did not rise when other stocks rose,but now the proportion of Samsung electronics has not risen,” noted Kim Sang-hoon,head of the KB Securities research Center. Despite concerns about a potential “AI bubble,” significant investment from Big Tech companies is driving demand.Tho, experts caution that rapid price increases in AI growth and memory semiconductors could create challenges.
The rally is unevenly distributed, with large-cap stocks considerably outperforming smaller companies. The top 100 KOSPI-listed companies by market capitalization have surged 51.52% this year, while the KOSPI small stock index, comprised of companies below 300 in market cap, has risen only 17.32%. This disparity is linked to limited exposure to potential benefits from US tariffs.Mirae Asset Securities Research Center head Park Hee-chan stated, “There are some observations that there might potentially be opportunities on the other side if the semiconductor stock price rises, but it is indeed unlikely.”
Macroeconomic anxieties remain a potential variable. While a slowing US economy and expectations of interest rate cuts are currently supporting global stock markets, a deepening economic slowdown and erosion of consumer sentiment could reverse these gains. Shinhan Investment & Securities Research Institute identified shrinking US employment as a risk factor for the KOSPI in the fourth quarter, possibly weakening US consumption.
