AI chip rally: South Korea's KOSPI crosses 7,000 for the first time

[South Korea economic growth on financial graph. South Korea financial growth on market graph]
Yanleth Rivera/iStock via Getty Images

South Korea's benchmark stock index crossed the 7,000-point mark for the first time on Wednesday, led by Samsung Electronics (SSNLF [https://seekingalpha.com/symbol/SSNLF]), as sentiment was lifted by the global AI-driven chip rally [https://seekingalpha.com/news/4585949-chip-stocks-post-best-25-day-stretch-since-2000-and-these-10-names-are-standing-out] and strong economic data.

The KOSPI index closed 6.5% higher at 7,384.56, paring some gains after reaching a record 7,426.60 on Wednesday.

The index's top gainers were Samsung (SSNLF [https://seekingalpha.com/symbol/SSNLF]), whose Seoul-listed shares rose over 14%, and Nvidia supplier SK Hynix, which gained about 11%.

Samsung's (SSNLF [https://seekingalpha.com/symbol/SSNLF]) market cap also surpassed $1T, making it the second Asian company to join the trillion-dollar club after Taiwan Semiconductor (TSM [https://seekingalpha.com/symbol/TSM]).

KOSPI's latest rally added to Monday's gains, which were fueled by strong manufacturing activity and trade on the back of AI-driven chip demand. The stock market was closed on Tuesday for a public holiday.

The index gained 75% so far this year, and is up about 189% over the past year. To note, KOSPI rose 76% in 2025, which was its best annual performance since 1999.

"If the demand for AI chips continues ​at this level, KOSPI could reach 10,000 points by the end of this year," Seo Sang-young, analyst at Mirae Asset Securities, told _Reuters_. "But if the demand ​collapses with worries over ⁠inflation and weak growth due to the Iran war, it could plummet to as low as 4,500."

Inflation in South Korea accelerated in April, but government measures like food vouchers, a gasoline price cap and a freeze on utility prices helped absorb some of the Iran war-driven energy shock

But inflation is expected to heat up going forward. "Strong exports, driven by semiconductors, will support overall growth, but the domestic economy will likely be hit harder by energy price hikes," ING economists projected.

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