KOSPI Breaks 5,800 as SK Hynix Surges: Is This the Start of a New Semiconductor Supercycle?

A Historic Rally: From 5,000 to 5,800 in Less Than a Month

The Korean stock market is moving at a breathtaking pace. On the 20th, the KOSPI closed at 5,808.53, up 2.31% from the previous session. What makes this move remarkable is not just the level itself, but the speed. The index first crossed 5,000 on the 27th of last month. It then broke through 5,500 on the 12th, and within just three trading days, it surged past 5,800.

This kind of rapid ascent is rare, even in bullish cycles. Market participants are calling it a “runaway rally,” driven largely by one powerful force: semiconductors.

At the center of this momentum is SK Hynix.

SK Hynix Takes the Lead While Samsung Moves Sideways

While Samsung Electronics posted a modest gain of just 0.05%, SK Hynix jumped more than 6%, reaching 949,000 won and even briefly trading above 950,000 won intraday. Out of the 131.28-point rise in the KOSPI that day, SK Hynix alone contributed 45.15 points — an outsized impact that underscores how dominant its influence has become.

Other stocks such as Hanwha Aerospace and Doosan Enerbility also rose, but their contributions were small in comparison. The session clearly belonged to SK Hynix.

This divergence highlights a key theme in the current market: selective leadership. Investors are no longer lifting all semiconductor names equally. Instead, capital is concentrating in companies seen as the strongest beneficiaries of the AI-driven memory boom.

BlackRock’s 5% Stake: A Strong Vote of Confidence

Adding fuel to the rally was regulatory disclosure showing that BlackRock, the world’s largest asset manager, increased its stake in SK Hynix above 5%. Through multiple funds, BlackRock now holds over 36 million shares, marking the first time since May 2018 that its ownership has exceeded this threshold.

This is more than just a technical filing. It sends a clear signal to global investors: institutional conviction in Korean semiconductors remains strong.

Part of this move appears linked to inflows into BlackRock’s Korea-focused ETF, the iShares MSCI South Korea ETF (EWY). With net assets of approximately $12.2 billion and a 19% allocation to SK Hynix, capital entering the ETF naturally increases exposure to the stock.

In other words, global money is not just watching — it is actively participating.

Institutions Drive the Rally While Foreign Investors Hedge

Interestingly, the rally unfolded despite heavy selling from retail and foreign investors. Individuals sold nearly 9.9 trillion won worth of shares, and foreign investors sold about 7.4 trillion won in the cash market.

However, institutions stepped in aggressively, purchasing over 16 trillion won. A significant portion — roughly 11.35 trillion won — came from financial investment entities, suggesting that ETFs and structured products are playing a major role in driving flows.

Foreign investors, while net sellers in the spot market, were strong buyers of futures, purchasing more than 12 trillion won worth. This positioning suggests a more nuanced strategy: reducing direct equity exposure while maintaining a bullish macro view through derivatives.

It is not outright pessimism. It looks more like strategic hedging.

Are Valuations Becoming a Concern?

SK Hynix’s share price has more than quadrupled over the past year, raising inevitable concerns about valuation. Yet analysts argue that the rally is supported by fundamentals.

According to industry research, semiconductor earnings forecasts have been revised sharply upward. One brokerage noted that net profit estimates for the sector rose from 137 trillion won to 259 trillion won, accounting for 96% of the upward revision in total KOSPI earnings expectations.

Even more interesting is the valuation comparison. Some analysts point out that the price-to-earnings ratio (PER) of semiconductor stocks is still below levels seen during the pandemic recovery, while non-semiconductor sectors of the KOSPI are trading near historical highs.

In other words, the sector driving the rally may not be as overvalued as critics assume.

Sector Rotation and the Broader Market

Beyond semiconductors, other supportive themes remain in play: improving industrial earnings, stronger shareholder return policies in financial stocks, and potential momentum from corporate law reforms.

However, not all segments are participating equally. The KOSDAQ index declined by 0.58%, as profit-taking emerged in large-cap names. This divergence suggests that the rally is not indiscriminate. Capital is rotating within sectors and concentrating in companies with the clearest earnings visibility.

Selective strength, rather than broad speculation, appears to define this phase of the market.

A Defining Moment for Korea’s AI and Semiconductor Future

The surge in SK Hynix reflects more than short-term trading dynamics. It symbolizes Korea’s central role in the global AI supply chain. As competition in artificial intelligence intensifies, high-bandwidth memory (HBM) and advanced semiconductor technologies have become strategic assets.

Global institutional capital seems to recognize this reality.

Whether the KOSPI can sustain its climb above 5,800 will depend on earnings delivery and continued capital inflows. But for now, the message from the market is clear: semiconductors are once again the engine of Korea’s equity story.

And this time, the conviction appears deeper — and more global — than ever before.

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