South Korea's KOSPI index reached record highs during Asian trading, adding roughly 1% in a single session and extending a rally that has now topped 150% over the past year. The surge is heavily concentrated in semiconductor giants Samsung and SK Hynix, which together account for about 40% of the index. Trade Minister Yeo Han-Koo used the moment to call for diversifying South Korea's export markets and supply chains against a backdrop of rising global protectionism and geopolitical strain.
The KOSPI's AI-driven rally makes South Korean semiconductor stocks a direct proxy for global AI infrastructure demand — if you hold broad emerging-market ETFs, you likely have meaningful exposure here. The concentration risk is real: with Samsung and SK Hynix making up 40% of the index, a single bad earnings cycle or export restriction could reverse gains sharply. The minister's push for supply-chain diversification signals that Seoul is trying to reduce that vulnerability, which could attract longer-term institutional capital.
Watch for Samsung Electronics Q2 earnings (expected late July 2025) and any U.S. or EU semiconductor export-control announcements, which could land at any time given ongoing geopolitical negotiations. Also monitor the Bank of Korea's next rate decision for signals on domestic economic conditions supporting the rally.
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