For the first time in history! Breaking 6,000 points! Two major chip stocks ignite the Korean stock market!

South Korea’s stock market is performing strongly!

Today (February 25), South Korea’s stock market opened higher and continued to rise, with the Korea Composite Stock Price Index (KOSPI) surpassing the 6,000-point mark for the first time in history. During trading, it approached a 3% gain. By the close, the KOSPI rose 1.91% to 6,083.86 points, hitting a new record high for the closing level. Samsung Electronics and SK Hynix both gained over 1%, setting new all-time highs.

Since the beginning of this year, the Korea Composite Stock Price Index has increased by over 44%. Samsung Electronics and SK Hynix contributed the most to this rise, with their year-to-date gains reaching 70% and 66%, respectively.

KOSPI Breaks 6,000 Points

Just a month after crossing the 5,000-point threshold, the benchmark index hit another milestone—breaking through 6,000 points on Wednesday.

The surge in global demand for storage chips is driving up the stock prices of the country’s chip manufacturers.

During Wednesday’s trading, the KOSPI rose nearly 3% at its peak, reaching a record high of 6,144 points. By the close, the index was still up nearly 2%. Leading the gains, Samsung Electronics, which has the largest weight in the index and is the world’s biggest memory chip manufacturer, increased by 1.75%. SK Hynix, a major supplier of high-bandwidth memory chips to Nvidia, rose 1.29%.

Since 2026, the KOSPI has gained over 44%, with South Korea’s total market capitalization approaching $3.8 trillion. Although its economy is much smaller than France’s, South Korea’s stock market capitalization has surpassed that of France. In late January, South Korea’s market cap exceeded Germany’s.

Bloomberg notes that for a long time, South Korea’s stock market was overlooked by foreign investors due to its low valuation. However, now the market has gained strength and become a notable winner in global markets. The so-called “AI panic trading” has instead become an opportunity for Korea—since software stocks represent a limited portion of the local market, hardware manufacturers continue to lead the upward momentum. Meanwhile, corporate governance reforms are fueling this rally, with expectations that the Korean parliament will pass a key bill later Wednesday to mandate the cancellation of treasury stock.

The latest rise in the Korean stock market is part of the global tech rally, following Meta’s announcement of a massive chip deal with AMD, easing concerns about AI technology disrupting existing tech giants.

Social media giant Meta announced a procurement plan exceeding $100 billion for AI chips, ordering from AMD, which helped the Nasdaq Composite rise over 1%, with the S&P 500 and Dow Jones both up more than 0.7%.

What’s Next?

Jung In Yun, CEO of Fibonacci Asset Management Global, said that with the KOSPI surpassing 6,000 points, further gains may be limited, and sustainability will depend on profit realization and whether the index can significantly broaden beyond just a few semiconductor giants. He added, “Without these factors, some consolidation or sector rotation would not be surprising.”

Last week, the U.S. Supreme Court’s reversal of Trump’s “reciprocal tariffs” ruling was seen as a tailwind. Tiffany Hsiao, portfolio manager at Matthews Asia, expects Korean exporters related to U.S. consumer demand—especially in electronics and components—to benefit from reduced tariff uncertainties.

There are initial signs that retail investors in Korea, who traditionally favor U.S. stocks over domestic ones, are returning. If this trend continues, it could drive the next wave of gains in the Korean stock market.

Recent sharp rises have also raised concerns, with some market observers closely watching valuation levels. “I was considering buying KOSPI futures, but given the relative increase over the past month, opening new long positions now is a tough decision,” said Matthew Haupt, portfolio manager at Wilson Asset Management in Sydney.

Since early 2025, Samsung Electronics’ stock price has nearly quadrupled, while SK Hynix’s stock has soared sixfold. Nonetheless, analysts remain optimistic, noting that South Korea’s two leading chipmakers are likely to continue benefiting from current storage chip shortages and ongoing AI demand. Overnight, Citi and Macquarie Capital both raised target prices for these giants. Macquarie’s forecast for Samsung Electronics suggests a potential 65% upside from current levels.

Macquarie analysts stated, “Samsung Electronics is best positioned to capitalize on this prolonged storage cycle. Its product mix is more focused on bulk storage chips, especially mature process and low-density products. Furthermore, in the next three years, only Samsung has the capacity to seamlessly ramp up new wafer fabs—P4 is currently progressing, and P5 is expected to start production from 2028.” They expect the strong cycle for DRAM and NAND prices to last at least two years. Driven by storage, Samsung’s net profit is projected to increase tenfold between 2025 and 2028.

Meanwhile, Samsung’s yield for 1c nm DRAM-based HBM4 AI memory has improved from 50% in Q4 2025 to nearly 60%, allowing Samsung to produce more HBM within limited capacity and capture larger revenue in high-margin markets.

Nomura analysts Cindy Park and Dongmin Lee wrote in a report, “If Korea accelerates corporate value reforms and structural improvements in KOSDAQ, we expect further revaluation, surpassing 8,000 points.” The path to 8,000 depends on whether the Korean government can implement multiple revisions to the country’s main commercial law, the Commercial Act, to fulfill reform commitments.

The latest proposal to require the cancellation of treasury stock aims to eliminate a mechanism that chaebol owners have used to strengthen control through minimal direct holdings, according to corporate governance experts.

(Source: Securities Times)