A novel trend known as "infant investing" is gaining popularity among young parents in South Korea. Parents begin selecting investment targets during the late stages of pregnancy and proceed to open accounts remotely via mobile phones as soon as their baby is born, placing buy orders immediately. As a result, South Korean infants become shareholders in major corporations like SK Hynix and Samsung Electronics while still in their cribs.
This trend is partly driven by government policies. Under South Korea's current Inheritance and Gift Tax Act, minors under the age of 19 receive a tax-free gift allowance of 20 million KRW per decade, which increases to 50 million KRW for adult children. Many parents leverage this policy by opening securities accounts for their newborns, transferring 20 million KRW at birth, another 20 million KRW at age 10, and 50 million KRW each at ages 20 and 30. By age 30, a child can legally receive tax-free assets totaling 140 million KRW (approximately $100,000) from their parents.
Parents prefer gifting stocks or ETFs over cash because gift tax is calculated based on the value at the time of the gift, with no additional taxes on subsequent asset appreciation. By purchasing ETFs early for their children, parents can avoid South Korea’s maximum 50% inheritance tax. According to data from Korea Securities Depository, as of the end of 2025, there were 343,694 minor shareholders in South Korea, accounting for 8.19% of all shareholders, with total shareholdings valued at approximately 2.68 trillion KRW.
In December 2025, 34,590 new accounts were opened for minors in a single month—nearly three times the number recorded in January 2025. The scale of securities holdings indicates that inheritance and gift transactions through accounts opened in children’s names are occurring frequently. While families in other countries may save cash gifts for children’s education funds, South Korean "kids" are already making regular investments in semiconductor ETF funds.
Another reason for this early-start investment strategy is South Korea’s ongoing stock market boom.
South Korea’s semiconductor sector is experiencing a major bull market. Over the past year, South Korean stock market rankings have surged. As of April 30, the Korea Composite Stock Price Index (KOSPI) closed at 6,598.87 points, up 56.59% for the year. Meanwhile, the KOSPI index hit an all-time high during trading on April 28, surpassing the U.K. to become the world’s eighth-largest stock market.
The surge in South Korean stocks is largely driven by two global semiconductor giants: SK Hynix and Samsung Electronics. Although the KOSPI index includes over 800 constituent stocks, more than 40% of its market capitalization is concentrated in these two memory chip leaders. Thus, the strong performance of South Korean stocks is largely attributable to the impressive gains of these two companies.
Year-to-date, SK Hynix’s stock has surged 97.54%, with a cumulative increase of 624.51% over the past year. Samsung Electronics has risen 83.90% this year, with a 297.3% gain over the same period.
Rapid advancements in the AI industry have been a key driver behind the soaring stock prices of these two companies. As AI models now operate with trillions of parameters, the demand for high-performance flash memory chips—commonly referred to as High Bandwidth Memory (HBM)—has surged to support these large models. Additionally, in AI inference scenarios, growing user request volumes and longer context lengths require storage systems with high throughput and low latency, further increasing the need for high-performance NAND flash memory.
South Korea’s stock market is benefiting from both trends. SK Hynix is the global leader in HBM, holding a 62% market share as of the second quarter of 2025. Samsung Electronics, meanwhile, has begun mass production of HBM4 products for NVIDIA and is developing next-generation HBM products, with market share expected to reach around 28%. Samsung also reported that its memory business sales doubled quarter-over-quarter in Q1 2026, with a 292% year-on-year increase, setting a new quarterly sales record. Overall, the company’s consolidated revenue reached $89.7 billion in Q1, up 43% from the previous quarter, while operating profit surged 756% to $38.83 billion, a historic high.
The booming market has attracted enthusiastic participation from South Korean investors, with infant investing being just one example of their aggressive strategies. While all-in investments are considered relatively extreme in other markets, South Korean investors often use leverage as a standard practice. Previously focused on U.S. tech giants like NVIDIA and Tesla, many are now turning to semiconductor-focused funds, particularly leveraged ETFs.
Data from the Korea Securities Depository on April 6 showed that after the outbreak of the Middle East war in March, the triple-leveraged semiconductor ETF SOXL attracted $1.2542 billion in net inflows, ranking first. It was followed by other leveraged products such as the triple-leveraged Nasdaq ETF (TQQQ) and the triple-leveraged Korea market ETF (KORU). According to researcher Shin Se-wi from the Korea International Finance Center, "South Korean investors are increasingly favoring high-risk assets like leveraged ETFs, while the proportion of fixed-income assets used for hedging has also risen."
In addition to leveraged investing, South Korean investors are also borrowing heavily to trade stocks. As reported on April 22, the balance of South Korea’s stock market credit transactions—where investors borrow money to trade—exceeded 34 trillion KRW ($23.084 billion) for the first time. Due to rising leverage activity, several securities firms have raised margin requirements and suspended some leveraged trading to curb irrational market expansion. Despite these measures, borrowing continued to climb, reaching 35.69 trillion KRW (approximately $24.231 billion) by April 28.
Many South Korean investors believe the current semiconductor super-cycle offers unprecedented profit opportunities—the more they borrow and invest, the more they stand to gain.
Similar to South Korea, Taiwan’s stock market has also performed strongly, buoyed by AI-related momentum. Before South Korea surpassed the U.K., Taiwan’s stock market had already overtaken it to become the world’s seventh-largest capital market. While South Korea relies on two semiconductor giants, Taiwan’s market is led by TSMC.
On April 27, TSMC’s shares reached a record high of NT$2,330. As of May 1, the stock had gained 32.21% year-to-date and 140.80% over the past year, with a market capitalization of approximately $1.75 trillion—significant given Taiwan’s total stock market valuation of $4.47 trillion.
In its 2025 annual report, TSMC highlighted that rapid AI development, especially the rise of large language models, is driving growing demand for computing power. Enterprise AI and sovereign AI applications are also expanding, supporting long-term semiconductor demand. Nearly all core AI chips worldwide, whether GPUs or specialized AI chips, rely on TSMC’s advanced manufacturing processes.
The strong performance of both South Korean and Taiwanese stock markets is linked to their exposure to "HALO" assets—a concept introduced by Goldman Sachs in February 2026. HALO refers to hard assets that are physically irreplaceable and resistant to disruption by AI, such as those in energy, utilities, basic resources, materials, transportation infrastructure, and high-end manufacturing equipment. South Korea and Taiwan both possess high-end chip manufacturing industries that represent HALO assets while also serving as critical suppliers in the AI supply chain.
Amid rising U.S.-Iran tensions, HALO assets are also seen as a hedge against global systemic risks. Increasingly, capital is shifting away from U.S.-centric financial assets toward tangible assets in non-U.S. regions. Julian Albertini, a portfolio manager at First Eagle Investment Management, which oversees $72 billion in assets, noted, "Energy security, defense, and supply chain resilience have become core to national strategic autonomy, driving a large-scale rebalancing of global capital from U.S. financial assets to physical assets elsewhere."
In simple terms, he suggests that the era of U.S.-dominated global finance is ending, and nations are now prioritizing energy security, defense, and supply chain resilience over quick financial gains.
The search for HALO assets has also influenced China’s A-share market. Analysts from China International Capital Corporation (CICC) argue that the "HALO trade" reflects global capital seeking new anchors amid shifting world秩序, with Chinese assets emerging as safe havens. Yang Chao, chief strategist at China Galaxy Securities, believes Chinese assets are being repriced for their "certainty and scarcity" in a highly uncertain global environment. He notes that China’s safety attributes stem from its industrial completeness, policy flexibility, and domestic demand resilience, representing a reassessment of systemic stability and growth certainty.
Despite the enthusiasm for AI and HALO assets, some influential figures remain cautious. Warren Buffett, speaking on the sidelines of the recent Berkshire Hathaway annual meeting, stated that the current investment environment is not ideal, emphasizing that the best buying opportunities arise when fear dominates the market. Berkshire reported a record $397 billion in cash reserves in its latest quarterly report.
Berkshire’s new leader, Greg Abel, also stressed that the company will not adopt AI for its own sake—it must create tangible business value. He reiterated Berkshire’s five core principles: maintaining a safety cushion of cash and Treasuries, financial independence, flexible allocation, tax efficiency, and avoiding arrogance, bureaucracy, and complacency.
While some may argue that Buffett and his followers are out of touch with global trends like HALO and AI, investing legend Howard Marks once wisely noted, "Buying good assets at the peak of optimism often leads to disaster." In the pursuit of HALO assets, maintaining a degree of caution may be the rarest quality of all in this scarcity-driven frenzy.
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