Korean Stocks Surge—Is a New Rally Starting?
The Korean stock market triggered a circuit breaker intraday, with the KOSPI index rising 5.04%. Samsung Electronics gained nearly 6.8%, while SK Hynix rose about 7.9%, making them the primary drivers of the market rally.
From an ETF perspective, Korea-related ETFs moved higher in tandem. Broad market trackers $iShares MSCI South Korea ETF(EWY)$ and $Franklin FTSE South Korea ETF(FLKR)$ rose 3.24% and 3.28%, respectively, largely reflecting the index performance. The 3x leveraged ETF $Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ showed stronger upside, rising 9.94%.
This shows that as Samsung and SK Hynix pushed the index higher, leveraged products amplified the move, with capital clearly concentrated in a semiconductor-driven rally.
On March 18, Samsung’s shareholder meeting delivered several key signals. The company noted rising AI-related demand, with increased orders for server HBM and SSD. It also proposed shifting chip contracts from quarterly or annual terms to longer-term agreements of 3 to 5 years.
Changes in contract duration directly affect the earnings structure. Moving from quarterly pricing to multi-year contracts reduces revenue volatility and improves earnings visibility, leading the market to re-rate Samsung’s valuation.
Supply-side dynamics are also clear. Manufacturers are prioritizing capacity for HBM, which requires roughly three to four times more wafers, effectively squeezing supply for conventional DRAM. Reduced supply is a direct driver of price increases.
On the demand side, expectations are being revised upward. Industry consensus suggests that AI is driving DRAM demand higher, while reports indicate that conventional DRAM supply growth is only around 3%–6%. With HBM absorbing capacity, supply tightening has become a clear trend.
Nvidia’s push into AI server expansion is driving simultaneous demand for both HBM and DRAM. Samsung and SK Hynix have both highlighted increased AI-related shipments. With capacity increasingly allocated to HBM, DRAM prices are being pushed higher, and profit growth is increasingly concentrated in memory.
Samsung’s semiconductor profit growth is mainly driven by DRAM, which is expected to contribute about KRW 42 trillion in 2026, far exceeding HBM and NAND. As prices rise, profits are directly amplified, and this shift is already being priced into valuations:
SK Hynix’s gains are tied to HBM orders. The company’s HBM shipments are primarily directed toward AI servers, with demand driven by compute expansion. Both volumes and pricing are being revised upward.
HBM revenue is projected to grow steadily from 2023 to 2026, with SK Hynix leading the market. By 2026, its revenue is expected to approach $30 billion, exceeding Samsung and Micron. The growth trajectory is clearly defined:
HBM demand is concentrated in AI servers. Under tight supply conditions, both shipment volumes and prices are rising, allowing revenue growth to translate directly into profits. This explains the strong stock price elasticity of SK Hynix.
On the policy front, Korea’s Financial Services Commission stated that it will, in principle, prohibit duplicate listings of parent and subsidiary companies, reducing future equity dilution expectations. This development supports a re-rating of large-cap companies.
Related ETF overview:
$iShares MSCI South Korea ETF(EWY)$ is one of the largest Korea broad-market ETFs, with an expense ratio of 0.59%. It primarily holds major weights such as Samsung Electronics and SK Hynix, making it a direct proxy for the overall Korean equity market. $Franklin FTSE South Korea ETF(FLKR)$ has a lower expense ratio of 0.09%, tracks the FTSE Korea Index, and offers more diversified holdings, making it suitable for long-term allocation.
$Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ is a 3x leveraged ETF on Korean equities, with an expense ratio of 0.95%. It is designed to amplify short-term movements and shows strong upside during rallies, but is not suitable for long-term holding.
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