KOSPI Surges Over 16% as SK Chairman Boosts SK hynix Stake

SK Hynix and Samsung Electronics produce roughly two-thirds of the world’s memory chips and are central to the high-bandwidth memory supply chain powering AI servers. Their heavy weighting in South Korea’s Kospi makes the benchmark unusually sensitive to shifts in the AI trade. Volatility has also been amplified since regulators approved 16 single-stock leveraged exchange-traded funds tied to the two companies in late May.

The Kospi closed 10.84% lower at 6,023.66 on July 28, prompting the Korea Exchange to impose a 20-minute marketwide halt. SK Hynix sank 14.7% and Samsung Electronics lost 13.4%. An attempted rebound failed on July 29, when the benchmark fell about 7.5% intraday as SK Hynix and Samsung dropped nearly 13% and 8%, respectively. The renewed selling reflected concerns over AI infrastructure financing, rising Chinese competition and leverage-driven fund outflows.

South Korea’s Kospi is heavily influenced by chipmakers Samsung Electronics and SK Hynix, making the benchmark a key gauge of global enthusiasm for artificial intelligence spending. The index topped 9,000 in June before concerns over an AI bubble, returns on massive capital expenditure and growing Chinese competition triggered a sharp reversal. It lost more than 17% over the previous three sessions.

On July 31, the Kospi surged 17.9% to 6,695.45, its biggest one-day gain on record, as a Wall Street rebound drew investors back into AI-linked shares. Samsung Electronics jumped 28% and SK Hynix climbed 30%. Korea Exchange data showed foreign investors bought a net 5.78 trillion won of shares, while retail investors sold 8.32 trillion won. The rally followed Microsoft’s stronger-than-expected quarterly results, which revived confidence that AI spending can generate profits.

South Korea’s equity market is heavily influenced by Samsung Electronics and SK Hynix, making the semiconductor cycle and foreign investor sentiment central to the KOSPI’s direction. Moody’s said second-quarter economic growth may slow, adding to concerns over the broader outlook. Still, AI-driven semiconductor exports remain a key source of support for the trade-dependent economy and a potential counterweight to weaker domestic momentum.

The KOSPI plunged 5% on July 20 as Samsung Electronics and SK Hynix led declines. Morgan Stanley cut its bearish-case target to 6,000 points, while Citi and Goldman Sachs also issued cautious assessments the same day. The selloff contrasted with longer-term industry optimism: SK Hynix’s chairman forecast that global demand for AI chips will surge 60% to 100% next year.

The AI boom has fueled demand for high-performance memory, making South Korean semiconductor giant SK Hynix a critical part of the global supply chain. With international investors sharply focused on AI hardware infrastructure, the company’s technological lead and market valuation have become gauges of the technology sector’s health. They also directly influence capital flows into Taiwan’s memory and optical communications stocks, drawing intense market attention.

SK Hynix’s American depositary receipts surged 27.3% in their first three days of trading, with their premium soaring to 51% in July 2026. The fervor helped drive South Korea’s KOSPI up nearly 8% intraday to touch 7,400, while SK Hynix shares in Seoul jumped 12%. Barclays subsequently raised its price target for SK Hynix to $330, saying a severe global memory shortage was only just beginning.

The expansion of AI data centers has fueled memory-chip demand, making Samsung Electronics and SK Hynix the main engines of South Korea's stock market. Together, the companies account for 54% of the KOSPI's market capitalization and nearly three-quarters of its gains this year. That has left South Korea's $4.9 trillion stock market highly concentrated, with both the index and leveraged retail-investor positions at risk if AI capital spending cools.

As of June 4, 2026, the KOSPI had risen more than 100% for the year, but it plunged as much as 7% intraday on June 5. Foreign investors have sold a net 15.8 trillion won since the start of June. The Korea Financial Investment Association said margin-financing balances hit a record 38 trillion won on May 29. Although Goldman Sachs raised its index target to 12,000 from 9,000, the market still faces a liquidity test from a potential Bank of Korea interest-rate increase in July.

Demand for Nvidia's AI accelerators drives orders for high-bandwidth memory, or HBM. Samsung Electronics and SK hynix together account for nearly half of the KOSPI's market capitalization, magnifying the impact of Nvidia's outlook on South Korean stocks. Samsung's labor dispute also involved 45,000 union members and threatened semiconductor output, making the removal of strike risk another major catalyst for investors betting on the AI supply chain.

After the market closed on May 20, 2026, Nvidia reported FY2027 first-quarter revenue of $81.6 billion, up 85% from a year earlier and above the $79.2 billion market estimate. It issued second-quarter guidance of $91 billion. On May 21, Samsung reached an agreement with labor on an average 6.2% pay increase and called off the strike. The KOSPI closed 8.42% higher at 7,815.59, with Samsung Electronics up 8.51% and SK hynix gaining 11.17%, prompting the Korea Exchange to activate a buy-side sidecar.

Generative AI has fueled demand for high-bandwidth memory (HBM) and server chips, putting Samsung Electronics and SK Hynix at the center of the global AI supply chain. Hedge funds are bullish on South Korea’s leadership in the memory market, betting that AI investment can continue to generate steady cash flow. Semiconductor stocks have consequently become the main engine driving South Korean equities higher.

Since the start of 2026, shares of Samsung Electronics and SK Hynix have risen 128% and 188%, respectively, helping the KOSPI surge about 80% and break above 8,000 for the first time. As South Korean retail investors chase the rally, margin-financing balances have climbed to 36 trillion won, boosting brokerage interest income while underscoring growing leverage and the rising risk of buying at elevated prices.

Generative AI is driving data-center expansion, making high-bandwidth memory, or HBM, a critical GPU component. Young South Korean investors are consequently shifting funds from cryptocurrencies into Samsung Electronics and SK hynix, betting on the companies’ positions in the global memory supply chain. The trend echoes Taiwanese investors’ longstanding enthusiasm for holding TSMC shares.

HBM demand has climbed rapidly in recent months, channeling market funds into Samsung Electronics and SK hynix and driving significant gains in both companies’ shares. The Korea Exchange’s KOSPI also surpassed 6,000 points for the first time, propelled by the AI chip rally and reflecting a clear shift among South Korean retail investors toward the AI hardware supply chain.