Samsung Electronics Co., Ltd. has reached a preliminary agreement with its labor union, defusing the threat of a strike at the world's largest memory chipmaker. This development triggered a rally in the South Korean stock market. On Thursday, the benchmark KOSPI index surged as much as 6.4%, with shares of Samsung Electronics soaring nearly 7% and SK Hynix jumping up to 8.4%. Due to the sharp rise in index futures, program trading was temporarily halted for both the KOSPI and the tech-heavy Kosdaq index by the Korea Exchange. The rally in chip-related stocks was also supported by better-than-expected earnings from U.S. chip giant Nvidia. South Korean stocks had declined over the previous two trading sessions, pressured by rising bond yields impacting tech shares and the looming strike risk at Samsung Electronics. "From a perspective of reducing uncertainty, the preliminary agreement between labor and management is good news," said Ha SeokKeun, Chief Investment Officer at Eugene Asset Management. "Furthermore, Nvidia's earnings call reiterated that AI-driven memory demand—particularly for high-bandwidth memory (HBM) and advanced DRAM—remains very strong." Thursday's market advance was primarily driven by local investors, while global funds continued their selling spree. As of Wednesday, foreign investors had offloaded more than $25 billion worth of KOSPI-listed stocks in May, largely taking profits as share prices of major chipmakers like Samsung Electronics and SK Hynix have more than doubled this year. Despite the KOSPI's rebound, overseas investors maintained their selling trend. The South Korean stock market has been one of the world's top performers leading up to 2026, with gains exceeding 80%, fueled by the AI boom driving a memory chip upcycle. "While the labor strike issue is significant, global investors are more focused on U.S. Treasury yields, foreign exchange volatility, and the broader AI cycle," said Jung In Yun, CEO of Fibonacci Asset Management Global. "The fundamentals of South Korea's semiconductor sector remain robust due to the global demand for AI infrastructure."
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