South Korea's KOSPI index historically surpassed the 7000-point milestone on May 6, reaching an intraday high of 7426.60 before closing at 7348.56, marking a 6.45% gain. This achievement was driven by a global semiconductor demand boom fueled by artificial intelligence and substantial foreign capital inflows.
On Wednesday, Samsung Electronics surged 14.41% while SK Hynix jumped 10.64%, with the two semiconductor giants collectively accounting for 44% of the KOSPI's total market capitalization. Foreign investors purchased 3.5302 trillion won worth of shares in the KOSPI market, with buying concentrated in Samsung Electronics, SK Hynix and SK Square. Meanwhile, institutional investors sold 2.2124 trillion won while retail investors were net sellers of 9197 billion won, creating a clear divergence between domestic and foreign capital flows.
Multiple positive factors converged during the session: market research firm IDC released a report indicating the memory semiconductor boom would last longer than previous cycles; Advanced Micro Devices surged 12% in after-hours trading, boosting the Philadelphia Semiconductor Index by 4.2%; and former President Trump's announcement about suspending escort vessels through the Strait of Hormuz triggered a significant oil price drop during Asian trading. News that Samsung Electronics was negotiating with Intel to provide foundry services for Apple further boosted market expectations for Samsung.
The KOSPI has gained 76% year-to-date, continuing the same growth rate seen throughout 2025. Mirae Asset Securities analyst Seo Sang-young noted that based on this year's earnings forecasts, the KOSPI's price-to-earnings ratio remains around 9 times, still in undervalued territory compared to historical valuations. He presented two contrasting scenarios: if AI chip demand maintains current levels, the KOSPI could reach 10,000 points this year; but if the Iran war triggers inflation concerns and economic slowdown, the index might retreat to 4,500 points.
**Chip Giants Lead Rally, Foreign Capital Dominates Trading** Samsung Electronics rose 14.41% to surpass 260,000 won per share, while SK Hynix gained 10.64% to break through 1.6 million won, and SK Square advanced 9.89%, with all three hitting record highs.
Foreign investors purchased 3.5302 trillion won in the KOSPI market, focusing their buying on Samsung Electronics, SK Hynix and SK Square. Meanwhile, institutional investors sold 2.2124 trillion won while retail investors were net sellers of 9197 billion won, highlighting the stark contrast between domestic and foreign investment behavior.
The severe memory chip shortage triggered by the AI boom represents the core driver behind Samsung and SK Hynix's sustained stock price increases this year. IDC's report further strengthened market confidence in this theme, noting that the current semiconductor industry landscape differs from previous clearly cyclical patterns, with this boom showing greater sustainability. Additionally, news that Samsung Electronics was negotiating with Intel to become an Apple foundry partner provided extra momentum for Samsung's share price.
**Samsung Enters Trillion-Dollar Club** Samsung Electronics' market capitalization surpassed $1 trillion, making it one of only two Asian listed companies to reach this milestone, alongside Taiwan Semiconductor Manufacturing Company. Currently, only four Asian listed companies exceed $500 billion in market value: TSMC, Samsung Electronics, SK Hynix and Tencent, all technology stocks reflecting investors' sustained strong interest in the AI sector.
The KOSPI's upward trajectory has been particularly rapid over the past year. When President Lee Jae-myung took office in early June 2025, the KOSPI was hovering around 2000 points. It broke through 3000 points within less than a month, reached 6000 points before the Iran war outbreak in February, and has now historically crossed 7000 points, representing a rapid revaluation. Starting from its previous base, the KOSPI has expanded significantly amid AI chips reshaping global capital markets, becoming one of the world's best-performing major indices.
**Valuation Debates and Diverging Outlooks** Despite the KOSPI's substantial jump, analysts hold clearly divergent views on future trends. Seo Sang-young stated that measured by earnings per share, South Korean stocks remain undervalued compared to historical valuations, with current P/E ratios around 9 times this year's earnings forecasts, suggesting further upside potential. However, he warned that if the Iran war triggers inflation concerns and growth slowdown, demand collapse could cause significant index retreat.
Ruling Democratic Party leader Jung Cheong-rae attributed the KOSPI's surge to a series of government policy measures, viewing it as evidence of restored confidence in the South Korean capital market that had long been undervalued. The South Korean government has previously promoted multiple capital market reform initiatives, with many observers attributing part of the past year's stock index gains to these measures.
Additional updates to follow...
Comments