South Korea's stock market has roughly tripled in value compared to a year ago, driven by insatiable demand for artificial intelligence chips.
The KOSPI index broke through 7,000 points for the first time in May 2026, posting year-to-date gains of nearly 100%. It has since approached 9,000.
The rally is powered by two companies. Samsung Electronics and SK Hynix together account for roughly 40% of the entire index's weighting. SK Hynix shares have surged more than 340%, fueled by global demand for high-bandwidth memory chips that power AI workloads. Samsung's market capitalization has crossed $1 trillion.
Retail investors, nicknamed "ants," have piled in aggressively, joined by significant foreign capital. This concentration creates significant risk. When two companies dominate a benchmark index, it is less a broad market rally and more a semiconductor bet.
The market experienced sharp pullbacks in June 2026, with corrections severe enough to trigger trading halts. The selling was straightforward profit-taking after AI-driven highs.
The bull case remains tied to massive AI infrastructure spending by hyperscalers like Google, Microsoft, and Amazon, which requires the advanced memory chips these firms produce. However, the stocks must eventually justify their valuations with earnings growth, not just narrative momentum.