The KOSPI index has finally conquered the 8,000 threshold, writing a new chapter in Korea's capitalism. The index, which hovered around 2,500 just a year ago, has more than tripled in a short period, an unprecedented pace that even surpasses the records of Japan's "bubble economy" in the 1980s.
Compared with the Nikkei 225 in the past, which took about four years to reach 30,000 after breaking 10,000, the current momentum of the KOSPI is astonishing. While Japan's annual growth rate was in the 40% range at the time, the KOSPI has achieved a 220% gain from its trough in just one year. It is a "lightspeed sprint" more than four times faster than Japan.
The undisputed protagonists of this whirlwind are the semiconductor dual leaders. Samsung Electronics, which was in the 50,000 won range a year ago, has surpassed 290,000 won despite labor-management strike risks, logging a return of more than fivefold. Analysts say a "retaliatory buying spree" that could flow in if the strike is settled is forming a powerful downside support line. SK hynix's surge has been even more exceptional. Its share price, which was in the 190,000 won range, has topped 1.9 million won on the back of its dominant position in the global High Bandwidth Memory (HBM) market, marking a tenfold rise and becoming the primary driver lifting the index.
In the securities industry, the view is that the semiconductor export momentum leading the domestic economy and stock market will continue for the time being.
Park Sang-hyun, an iM Securities researcher, said, "Investments related to artificial intelligence (AI) in the United States are stronger than expected, and even China is likely to expand AI investment, so Korea's semiconductor export cycle will likely maintain a favorable trend for quite some time," adding, "In particular, a recovery in export momentum to China is highly likely to have a supportive effect on the domestic export cycle."
Lee Kyung-min, a Daishin Securities researcher, said, "While the strength of the semiconductor sector is standing out, the share prices of Samsung Electronics, SK hynix, and SK Square, which rank Nos. 1–3 by market cap, each surged 20%–40% in May alone, far outpacing the KOSPI's gains," adding, "They account for 80.4% of the increase in the KOSPI's market capitalization in May, clearly playing a leading role."
The securities industry assesses that powerful supply-demand dynamics, rather than valuation logic, are dominating the KOSPI market. Not only traditional indicators such as the price-earnings ratio (PER) but also strong buying pressure are acting as factors driving the market.
Kim Dae-jun, a researcher at Korea Investment & Securities Co., explained, "Because semiconductor corporations' results are so strong, the profit (E), which is the denominator of the price-earnings ratio (PER), has grown, easing valuation burdens," adding, "Even though the index has surged, growth in semiconductor profits is underpinning it, so investors still see this as a 'market to buy.'"
Amid a phase where the rationale of resolving the Korea discount and record-high liquidity collide, some predict that whether the KOSPI settles above 8,000 ultimately depends on the sustainability of semiconductor earnings and the continuity of supply-demand dynamics.
Researcher Kim Dae-jun said, "For the stock market boom to continue, it is important whether the market can be convinced that the semiconductor industry can keep growing," adding, "In the case of Samsung Electronics, labor-management talks are underway now, and the share price trend could vary depending on whether an agreement is reached."