South Korea’s $60 Billion Semiconductor Exports to Drive the KOSPI’s Resurgence - The Diplomat

With semiconductors amounting to around two-thirds of the Korea Composite Stock Price Index’s (KOSPI) market capitalization, South Korea’s economy has become intrinsically linked to the ongoing artificial intelligence boom. As exports reach record highs, optimism is growing among investors that the KOSPI can recapture momentum to close out 2026.

Monthly export value for semiconductors surpassed $60 billion in September, breaking the $120 billion total export threshold for the first time in South Korea. The trend was driven by accelerating demand for AI and memory chips and is paving the way to $1 trillion in annual exports domestically.

Critically, September’s export figures represented an 83.5 percent boost compared to the same period last year, while daily averages for the month reached a 105 percent year-over-year increase to $5.63 billion per day.

The KOSPI responded to the news with a 2 percent jump. Despite a clear heavy reliance on semiconductor stocks following years of exponential growth, signs of strength in South Korea’s export activity are likely to instill a newfound confidence in the long-term outlook for the nation’s markets.

South Korea’s strength in exports has helped to further deepen the growth of the KOSPI’s star players, Samsung and SK Hynix, which posted growth of 2.79 percent and 3.21 percent, respectively, after September’s figures were released by government sources. The two stocks now account for 66 percent of the entirety of the KOSPI index by market capitalization, underlining the nation’s reliance on the performance of the semiconductor giants.

“There’s a clear case for South Korea as the most impacted market by the rise of artificial intelligence,” explained Vsevolod Smirnov, CMO at Just2Trade. “Since the launch of ChatGPT by OpenAI in November 2022 and the beginning of the GenAI boom, the KOSPI gained more than 270 percent to reach its 2026 peak, but the fact that the index has since tumbled 22.5 percent over the past three months is a warning sign of overreliance.”

The KOSPI surpassed 9,000 in June, a historic high water mark for the index. But it didn’t remain there long. The KOSPI dropped back into the 8,000s just a week after hitting its all-time record, and spent most of July, August, and September in the 6,000-range.

However, Smirnov sees cause for optimism moving forward. “The good news is that export momentum means that these two semiconductor leaders aren’t selling magic beans. There’s a clear product and evident investor appetite,” he explained. “Both Samsung and SK Hynix have a relatively grounded trailing price-to-earnings ratio of around 10.9 and 7.4, respectively, indicating that both companies are well-positioned to fill their boots moving forward.”

Analysts expect a return to the positive momentum that helped to push the KOSPI to new highs. Mirae Asset Securities analyst Kim Young-gun noted that DRAM and NAND memory chips are likely to stay undersupplied through 2028, which is likely to drive prices higher in the mid-term future.

The climate surrounding Samsung, in particular, has remained more optimistic in recent weeks, with the company avoiding a workers’ strike by offering bonuses averaging $400,000. Given that the tech leader is single-handedly responsible for a quarter of South Korea’s exports, the resolution is set to support the national economic outlook.

The biggest threat to the long-term performance of the KOSPI is wider economic uncertainty, which has become increasingly pertinent as the conflict in Iran has brought higher global oil prices and U.S. Treasury yields. Although the index naturally correlates to the ongoing AI boom, the KOSPI tumbled into the 6,600 range earlier in September as a result of international oil prices climbing beyond $100 a barrel and 10-year U.S. Treasury yields exceeding 5 percent.

These factors could lead to shortfalls in net buying due to macroeconomic uncertainty. This, coupled with the traditional underperformance of the KOSDAQ following the Chuseok holiday season, could create a weaker conclusion to 2026 for South Korean markets.

However, the sheer strength of the AI boom appears to be offering some resilience. There is increasing U.S. demand for AI infrastructure, as Wall Street’s “Magnificent Seven” collective of hyperscalers and AI adopters have committed more than $750 billion in capex toward their own AI buildouts.

With competition over AI investment accelerating beyond GPUs and memory chips toward infrastructure and power, as well as servers and communications, Samsung and SK Hynix are well-positioned to continue achieving their collective potential on the KOSPI throughout the fourth quarter and beyond – in spite of ongoing macroeconomic concerns.

Although a return to 9,000 is unlikely at a time when U.S. Treasury yields are expected to rise further, South Korea’s positive export figures show a level of resilience that should encourage investors. The KOSPI has been one of the world’s best performers since 2022, following the emergence of the AI rally. While headwinds are continuing to mount, there’s no reason the optimism has to subside looking ahead.

The upcoming earnings season for South Korea’s semiconductor giants will be critical. Should the likes of Samsung and SK Hynix show that they can justify their momentum, there’s no reason why 9,000 can’t be a legitimate target for the first quarter of 2027.