KOSPI Rockets 17% on Chip Strength as Global Tech Rally Recoups Massive Selloff

KOSPI Rockets 17% on Chip Strength as Global Tech Rally Recoups Massive Selloff​

South Korea's benchmark KOSPI index staged a dramatic rebound on Friday, surging over 16% to recuperate nearly all of the losses sustained earlier in the week. The powerful rally was fueled by significant gains in key heavyweight chipmakers, including Samsung Electronics and SK Hynix. Trading was briefly halted, mirroring volatility experienced throughout the year amidst sharp market swings.

Semiconductor Giants Drive KOSPI Rebound​

The KOSPI closed at 6,549 points, up 17%, having previously tumbled by almost 17% over the preceding three sessions. This surge comes after a period of intense selling across semiconductor stocks, which had been driven by fears regarding mounting competition from Chinese memory chipmakers.

Samsung Electronics shares surged more than 21%, while SK Hynix soared over 26%. Both companies reported strong quarterly results earlier this week. Samsung posted a record quarterly profit, driven by its semiconductor business, and anticipates a favorable supply-demand environment for memory chips lasting until at least 2027, citing increased long-term customer contracts. SK Hynix also reported record revenue, despite its quarterly profit coming in below elevated market expectations.

Wall Street Tech Leads Global Momentum Shift​

The rally in Asia follows robust performance by US technology stocks on Thursday. Investor sentiment improved significantly as Wall Street advanced strongly, led notably by mega-cap tech companies. Microsoft bolstered confidence following strong Azure cloud growth reports, easing concerns that massive AI investments were not translating into sufficient returns. Amazon also jumped more than 9% in extended trading after reporting second-quarter revenue exceeding analyst expectations, supported by its continued cloud computing strength.

The positive momentum quickly spread to Asia as the chip giants reflected this improved global outlook. On the US side, the Nasdaq Composite rose 2.8%, closing at 25,122.18, ending a six-session losing streak. The Dow Jones Industrial Average gained 613.92 points (or 1.2%) to finish at 52,208.06, and the S&P 500 advanced 1.7% to 7,437.63.

Geopolitical Risks and AI Concerns Fuel Volatility​

Earlier this week, semiconductor stocks faced significant pressure as investors questioned the long-term viability of massive artificial intelligence spending. The central concern remains whether companies investing billions into AI can generate returns sufficient enough to justify those enormous expenditures.

Developing market competition also fueled investor apprehension. ChangXin Memory Technologies (CXMT) made a blockbuster IPO debut, with its shares soaring nearly 500%. Reports indicated that a Chinese state-backed company had begun producing immersion DUV lithography equipment. Market analysts maintain that the concern lies less in CXMT's current earnings and more in its potential for accelerated capacity expansion to rival Korean companies following its IPO.

Government Steps In Amid Domestic Turmoil​

Despite the sharp recent correction, South Korea maintains a strong standing as one of the world's best performing equity markets in 2026. However, this market has seen dramatic swings, with KOSPI falling nearly 40% from its June peak of 9,386.

The government is actively reviewing measures intended to protect investors’ wealth from the stock market instability. Finance Minister Koo Yun-cheol confirmed that the government is scrutinizing stabilization measures, including adjustments to regulations concerning single-stock leveraged ETFs, which some analysts point out exacerbate volatility. The finance ministry previously noted that increased concentration in the semiconductor sector has intensified financial market volatility due to foreign and institutional investor profit-taking and changing expectations regarding global artificial intelligence.