KOSPI Enters Bull Phase: Semiconductor Boom Lifts Index by 20%
South Korea's KOSPI index has confidently entered a bull market phase, showing growth of more than 20% from July lows. The key driver of this rally has been the powerful recovery in memory chipmaker stocks, which set the tone for the entire regional market.
This week, we witnessed an impressive turnaround in the technology sector. Sandisk (SNDK) shares surged 13.7% on Thursday after the company presented an aggressive long-term growth strategy. This momentum instantly spread to Asian markets, and on Friday we saw the rally continue.
Sandisk's strategy as a catalyst
Sandisk shares closed at $1528.11 after top management unveiled plans to achieve double-digit revenue growth through 2030. The company also confirmed its intention to maintain adjusted gross margin at around 80%, which is an extremely ambitious figure for the industry.
Chief Financial Officer Luis Visoso outlined a clear priority: returning excess cash flow to shareholders after investments in development. This strategy resonated strongly with investors, especially amid new long-term contracts worth $93.9 billion, including agreements with three major data center operators in the U.S. It is this order backlog that formed the basis for the "buy" recommendation from Evercore ISI analysts.
A wave of growth across the sector
The recovery was not limited to a single company. Micron (MU) shares rose 4.2%, while South Korean giant SK Hynix (SKHY) gained 7.3%. Hard drive manufacturers Seagate (STX) and Western Digital (WDC) also showed solid growth of 4.9% and 7.3%, respectively.
In Asian trading on Friday, the rally continued: Japan's Nikkei 225 rose 1.73%, Topix gained 0.92%, and KOSPI climbed 2.11%. The small-cap KOSDAQ index, which showed resilience even during the recent downturn, also rose 0.84%. KOSPI broke through the psychologically important 7000-point level for the first time in 15 trading sessions.
The sustainability of the bull trend is in question
However, not all market participants are ready to call this the start of a long-term reversal. Peter Kim from KB Securities attributes the previous decline more to technical factors and capital flows rather than a deterioration in the fundamentals of semiconductor manufacturers. In his assessment, the wave of forced liquidation of credit positions is already subsiding.
Jeong In Yun from Fibonacci Asset Management Global expressed a more cautious stance, noting that he would not call the current dynamics a "fully new bull market." Foreign capital inflows could hold the index at the 7000 level, but further momentum will depend on how long the optimism around Sandisk's forecast can support the rest of the memory sector companies.
My view: we are witnessing a classic recovery from oversold conditions, supported by strong corporate signals. However, the sustainability of this trend will be tested in the coming weeks. Investors should closely watch whether demand for AI-related memory can offset a potential slowdown in traditional segments.