Memory boom drives South Korea’s benchmark share index past 6,000 for the first time

SEOUL – South Korea’s stock benchmark has crossed a new milestone just a month after surpassing the once-unthinkable 5,000 mark, as surging global memory demand powers the country’s biggest chipmakers. 

The Kospi Index advanced as much as 2.9 per cent, before closing up 1.9 per cent at 6,083.86. Samsung Electronics gained 1.75 per cent while SK Hynix rose 1.3 per cent.

With the benchmark now up 45 per cent for 2026, South Korea’s stock market capitalisation has also moved past France’s, following January’s overtaking of Germany’s.

Long overlooked by foreign funds despite being undervalued, Korean stocks have now emerged as clear winners in the global market. The so-called “AI scare trade” has proven a boon for the country, where software stocks play only a minor role and hardware manufacturers continue to drive the market higher.

Corporate governance reforms have helped fuel the rally, with Parliament expected to pass a Bill later on Feb 25 requiring companies to cancel treasury shares.

The latest gain is part of a global tech rally following Meta Platforms’ deal to buy chips and computers from Advanced Micro Devices to power artificial intelligence models. 

“With the Kospi now at 6,000, upside from here is likely to be more incremental, and sustainability will depend on earnings delivery and a meaningful broadening beyond a handful of semiconductor heavyweights,” said Fibonacci Asset Management Global chief executive Yun Jung-in. “Absent that, some consolidation or rotation across sectors wouldn’t be surprising.”

The US Supreme Court’s decision last week to strike down President Donald Trump’s reciprocal tariffs is also seen as a boost for Korean equities.

Ms Tiffany Hsiao, portfolio manager at Matthews, expects “Korean exporters tied to US consumer demand – particularly in electronics and components – would benefit from any reduction in tariff uncertainty”.

There are early signs that retail investors, who have traditionally favoured US stocks over local ones, are returning home. Such a shift, if sustained, could drive the next leg of the rally.  

In late January, Korea’s market value overtook Germany’s, and this week it climbed to US$3.76 trillion (S$4.76 trillion), exceeding France’s despite its much smaller economy. Such a swift advance might normally spark concern, and some market watchers are closely monitoring valuations. 

“I was looking at buying Kospi futures, but given the relative move in Kospi the past month, it’s a tough call to initiate new longs,” said Mr Matthew Haupt, portfolio manager at Wilson Asset Management in Sydney.

Samsung share prices have nearly quadrupled since the start of 2025, while those for SK Hynix have jumped sixfold. 

But analysts remain broadly bullish, saying Korea’s two leading chipmakers will likely continue to benefit from the ongoing memory crunch and sustained AI demand.

Citigroup and Macquarie Capital both raised target prices overnight, with Macquarie’s forecast for Samsung implying a 65 per cent upside from the current share price.

Nomura recently raised its target for the Kospi gauge to as high as 8,000 in the first half of 2026, citing a memory super-cycle, earnings strength in the AI capex chain and defence sector, and a re-rating of the physical AI supply chain. 

“If Korea can accelerate its corporate value reform and structural improvement of the Kosdaq, we expect a further re-rating beyond 8,000,” its analysts said in a note. 

The path to 8,000 also hinges on whether the government can deliver the reforms promised through multiple revisions of the Commercial Act, South Korea’s main business law, they wrote. 

The latest proposal, requiring the cancellation of treasury shares, would eliminate a mechanism that governance experts say conglomerate owners have used to reinforce control with minimal direct holdings. BLOOMBERG