South Korea's KOSPI composite index shattered the 7,000 barrier for the first time on Wednesday, closing at a record 7,384.56. The 6.45% surge was fueled by explosive demand for artificial intelligence chips, propelling the benchmark to new heights.
The index is up roughly 75% year-to-date, following a 76% gain in 2025—its strongest performance since 1999. The rally underscores South Korea's central role in the global AI supply chain, with heavyweight semiconductor stocks leading the charge.
Market analysts attribute the momentum to sustained institutional and foreign buying, particularly in memory chip manufacturers that supply components for AI data centers. The KOSPI's ascent reflects broader investor optimism that AI-driven demand will continue to boost exports and corporate earnings.
However, some observers caution that the breakneck pace may be unsustainable. The index has more than doubled over two years, raising concerns about frothy valuations and potential profit-taking. A pullback from these levels could be sharp if global AI sentiment shifts.
South Korea's finance ministry has signaled it is monitoring the market closely. No specific policy actions have been announced, but officials have warned that excessive volatility could prompt intervention.