How AI chip boom helped South Korea overtake India as one of world’s biggest stock markets

South Korea’s stock market is experiencing a historic rally and has recently gone past India to become the sixth largest share market in the world. The going of South Korea’s Kospi index to record high has famously been attributed to the rising demand for AI chips and two local chipmakers who have gone on to become some of world’s most valuable companies.

How did AI chipmakers lead to ‘historic surge’ in South Korea market?

Chip maker SK Hynix joined the trillion-dollar valuation club last week where it found a place alongside Samsung Electronics and Taiwan Semiconductor Manufacturing Company (TSMC) in the companies in Asia that have reached the landmark.

As per a Guardian report, SK Hynix’s share price has surged around 1,000% over the past year, while Samsung’s stock has climbed roughly 500%. The growth in the two chip makers has led to massive uptick in South Korea’s stock market since late 2025 with Kospi Index reaching a all-time high of 8,800 this week which marked a 220% rise in the index over the last 12 months.

Meanwhile, investment bank Goldman Sachs has also made a bullish prediction for the market, raising its 12-month Kospi target to 9,000 and calling the current environment as a “once-in-a-generation surge” in semiconductor earnings.

‘Dramatic shift’ underway in South Korea:

Peter Kim, global investment strategist at KB Securities, told The Guardian that there is a ‘dramatic shift’ underway where after years of investments in software giants like Alphabet, Amazon and Meta, capital is now shifting towards semiconductor companies that provide the infrastructure needed to train and run AI models.

He notes that chipmakers had limited investment appeal until recently chipmakers had limited investment appeal but the rise of AI has led to an ‘amazing reversion’.

Notably, the growing popularity of generative AI tools like ChatGPT, Gemini and Claude has led to unprecendented demand for advanced processors and memory chps which places the Korean chipmakers at the centre of AI supply chain.

At the centre of it all is Nvidia, the world’s most valuable company. While Nvidia designs the AI accelerators used by major AI firms, the manufacturing of these chips is outsourced to TSMC, which coincidentally also became the first comapny in Asia to touch the $1 trillion mark.

Meanwhile, the high-bandwidth memory chips are supplied by Samsung, SK Hynix and US-based Micron.

Nvidia CEO Jensen Huang was recently in Taiwan as he unveiled the company’s latest RTX Spark chip for Windows PC. Reportedly, he also met with top South Korean tech executives while Taiwan and is also set to fly to South Korea this week.

How South Korea could be too dependent on just two companies?

The two companies in question: Samsung Electronics and SK Hynix have seen very high growth as the rise of advanced AI models and data centeres led to the creation of unprecedented demand for advanced processors and memory chips.

However, the report by Guardian also suggests that South Korea could be too dependent on its two trillion dollar companies. The report notes that t Samsung and SK Hynix are responsible for as much as 70% of the Kospi’s gains in 2026 which leaves the index exposed to global AI spending cycle and supply chain issues.

Russ Mould, investment director at AJ Bell, told The Guardian that share price charts of Samsung, SK Hynix and Micron bear some similarities to technology stocks during the 2000 dot-com era. However, Mould argues that the boom and bust cycles of chip sector are behind us “thanks to demand from AI”.