South Korea's KOSPI surged 4.56% to a fresh all-time high of 8,457 on Wednesday, officially doubling year-to-date in 2026. According to reports from The Kobeissi Letter, the benchmark added around $220 billion in market value in a single session and roughly $900 billion in May alone. The rally was primarily driven by memory chip stocks, with Samsung Electronics jumping 6.5% and SK Hynix adding 9.5% on Wednesday. The surge has exceeded expectations, with many investors predicting moderate growth this year instead of the explosive performance that has now crossed record territory.
SK Hynix topped $1 trillion in market value for the first time on Wednesday, joining domestic rival Samsung Electronics and U.S.-listed Micron Technology in reaching the milestone on an AI-driven rally. As reported by Reuters, SK Hynix shares closed at 2.243 million won, after rising as much as 14.9% during the session to take the South Korean chipmaker's market value to a record 1,680 trillion won ($1.12 trillion). Samsung shares also rose as much as 8%, before closing 2.7% higher at a record close of 307,000 won, as unionised workers in South Korea voted to approve a tentative wage deal, averting a strike that threatened global chip supplies. The KOSPI, which has emerged as the world's best performer in a global AI boom, has risen 95% so far this year after rising 76% last year.
The Korean equity rally has been significantly boosted by retail investors rushing into leveraged ETFs, with the Korea Financial Investment Association's website briefly offline on Wednesday as investors rushed to access courses required for leveraged ETF investments. According to Reuters, financial investment firms were net buyers of KOSPI shares worth 1.3 trillion won, while retail investors also bought 403 billion won, though foreign investors were net sellers. The first South Korean single-stock leveraged ETFs linked to Samsung and SK Hynix surged on their market debut, posting double-digit gains as semiconductor shares rallied. As reported by The Kobeissi Letter, the same retail base that previously anchored Korea's Bitcoin market is now abandoning crypto investments, with Korean crypto volumes having crashed roughly 80% as won liquidity has rotated into equities.
The KOSPI is now up roughly 100% year-to-date, with Samsung Electronics and SK Hynix controlling around 42% of the index by market capitalisation. As reported by Reuters, analysts remain bullish on the memory chip sector, with Kim Young-gun from Mirae Asset Securities raising target prices for SK Hynix and Samsung by 18.8% and 14.6% to 3.8 million won per share and 550,000 won respectively. Memory chip prices have doubled in the first quarter alone from the previous period and are forecast to increase by up to 63% in the current quarter due to AI data centre demand. The rally has been fueled by semiconductor manufacturers reporting massive demand from AI infrastructure companies worldwide, with UBS having more than tripled its target price for Micron citing "the structural changes AI has driven to the entire memory complex."
The Korean equity rally benefits from government support through investment incentives for semiconductor production and AI research, which have encouraged long-term institutional participation. Officials have introduced measures that support the ongoing rally, with South Korea stocks connected with robotics and battery production also gaining momentum. Investors now view the country as a central player in the future technology economy, with only three Asian companies joining the $1 trillion club, including TSMC. The KOSPI index live now acts as a global sentiment indicator for technology investors, with many analysts believing the rally still has room to grow despite some volatility risks. As reported by Reuters, there are only three Asian companies that have joined the $1 trillion club, making South Korea the first country other than the U.S. to have more than one company reach that market value milestone.
