KOSPI enters bull market phase: chip rally adds 20% to the index
South Korea's KOSPI index has confidently returned to bull market territory, showing a gain of more than 20% from July lows. The key driver of this upward move was the recovery of memory chipmaker stocks, which set the tone for the entire Asian region.
Sandisk's forecast became a catalyst for the entire sector
The impetus for the reversal came from optimism around Sandisk (SNDK). On Thursday, the company's shares surged 13.7% after publishing an ambitious long-term outlook. Top management outlined a strategy implying mid- to high-double-digit revenue growth through 2030, while maintaining adjusted gross margin at around 80%. CFO Luis Visoso also announced a capital return program for shareholders, stating that all excess cash flow after investments would be directed to payouts. This news instantly revitalized the entire data storage market.
A wave of gains swept across Asia and the U.S.
Other giants also picked up on the positive signal from Sandisk. Micron (MU) shares rose 4.2%, while South Korea's SK Hynix (SKHY) gained 7.3%. Hard drive makers Seagate (STX) and Western Digital (WDC) also closed higher, up 4.9% and 7.3%, respectively. On Friday, Asian markets took up the baton: Japan's Nikkei 225 rose 1.73%, the Topix gained 0.92%, and the KOSPI itself soared 2.11%. Notably, the KOSPI broke through the psychological level of 7000 points for the first time in 15 trading sessions, while the KOSDAQ index, which showed resilience even during the recent downturn, rose another 0.84%.
Sustainability of the rally: expert opinions
However, not all market participants are ready to call the current rise the start of a long-term bull trend. 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 makers. In his assessment, forced liquidation of credit positions is already subsiding. Meanwhile, Jung In Yun from Fibonacci Asset Management Global urges caution, noting that he would not fully call this a new bull market. Foreign capital inflows, fueled by optimism around Sandisk, could hold the index at the 7000 level, but further momentum will depend on how long this positive sentiment can support the rest of the memory sector companies.
My analysis: The market is clearly oversold, and the current bounce looks like a logical correction. Nevertheless, the sustainability of this rally will depend on real data on chip demand in the second half of the year. I recommend investors watch the quarterly reports from SK Hynix and Samsung — they will provide a clearer signal on whether the current rise is the start of a sustainable trend or merely a temporary respite.