South Korea's Kospi hit an intraday record on Tuesday as investors piled back into chip stocks, driven by renewed AI demand and brighter semiconductor outlooks.

Tech names led a broad rebound. South Korea's Kospi rose as much as 2.3% to an intraday high on Tuesday, powered by gains at major chipmakers — notably Samsung Electronics and SK Hynix — as investors shifted focus from geopolitical headlines to earnings and AI-related demand. The rally wasn't confined to Seoul: Taiwan's main market also pushed to fresh highs, helped by Taiwan Semiconductor Manufacturing Co., while the MSCI technology index for the region climbed, extending its year-to-date advance. Momentum in semiconductors has spilled into global indices too, with the Philadelphia Semiconductor Index notching an extended winning streak that reflects broader optimism for chipmakers. Investor mood has swung since the early days of the Middle East conflict, when surging oil prices prompted broad selling in Korea. Signs of easing tensions and reports of diplomatic engagement have calmed nerves, allowing the AI theme to regain prominence. Foreign and local institutions were net buyers on Tuesday, while Korean retail investors sold into strength, underlining differing positioning among investor groups even as headline indices climbed. Even after strong gains this year, some major Korean tech names still trade at relatively modest multiples by global standards. Analysts' expectations have moved higher and consensus forward earnings estimates for the Kospi have risen, helping underpin the market's strength and prompting some banks to raise targets. Several banks have outlined upside scenarios tied to a cycle that keeps memory chip prices higher for longer, pointing to further potential gains if momentum holds. The AI boom has put a premium on compute capacity and memory. Demand for specialised chips and high-bandwidth memory has tightened supply chains already affected by investment cycles and pandemic-era disruption, supporting profits and earnings expectations for chipmakers. Investors are betting the AI wave will keep demand strong enough to sustain prices and margins, with strategists describing a "higher for longer" environment for memory that supports producer valuations — at least in the near term.

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Investors appear to be rebuilding conviction as AI-driven demand lifts chipmakers and shifts focus away from earlier geopolitical jitters, supporting near-term earnings and market momentum.

This article was created with AI assistance.