South Korean chip stocks rally as Kospi jumps 17% on US AI optimism
South Korea's Kospi index surged almost 17% as regulatory intervention and strong US tech earnings reversed a week-long rout in AI-linked chip stocks, easing concerns over the sustainability of massive AI capital expenditure.
South Korea’s benchmark Kospi index surged almost 17% in afternoon trading, led by a sharp rebound in semiconductor stocks that had been battered earlier in the week. SK Hynix climbed more than 17%, while rival Samsung Electronics gained 23%. Both companies had previously seen their market values slump amid a deepening sell-off in artificial intelligence-related equities.
Investors had grown anxious that the hundreds of billions of dollars being poured into AI by major technology firms was not yet generating proportional returns, sparking a reassessment of chip valuations. However, the latest figures from Amazon and Microsoft—which jumped more than 9% and 15% respectively in Thursday's after-hours New York trading—helped dispel those fears. For suppliers like SK Hynix, a key provider to leading AI chip designer Nvidia, the US results confirmed that the buildout of data centers and related infrastructure is continuing at pace.
The sharp upward move was also supported by domestic authorities. South Korean regulators unveiled measures intended to arrest the aggressive selling pressure that characterized the first half of the week. While the regulatory backing provided a floor for chip stocks, it also highlighted the fragility of a market that has seen extreme price swings.
This kind of volatility has become a defining feature of South Korean equities in recent months. The tech-heavy Kospi has proven highly susceptible to sudden shifts in sentiment, largely because the market has attracted an influx of retail investors. The index has been halted multiple times this year by circuit breakers, a mechanism deployed to force a pause in trading and prevent disorderly panic selling.
Despite the recent turbulence, the broader trend for the Kospi remains sharply positive. The index has doubled in value this year and, even after a series of significant drops from a mid-June record high, it sits 50% above its closing level at the end of 2025.
The momentum in Seoul quickly spilled over into other major Asian technology hubs. Surging semiconductor stocks helped lift broader markets in Japan and Taiwan. For institutional investors,
