KOSPI returns to bull market territory: semiconductor demand lifts index by more than 20%
South Korea's KOSPI stock index has once again confirmed its bull market status, posting a gain of more than 20% from July lows. The key driver of this momentum has been a powerful recovery in memory chipmaker stocks, signaling a shift in sentiment across Asia's technology sector.
On Thursday, Sandisk (SNDK) shares surged 13.7% following the release of the company's ambitious long-term forecast. This spike quickly rippled across the sector, setting a positive tone for Asian markets on Friday.
Sandisk's strategy inspires the market
Closing at $1528.11, Sandisk presented investors with a roadmap through 2030. Management is projecting mid- to high-double-digit revenue growth while maintaining adjusted gross margin at around 80%. CFO Luis Visoso announced a capital return program: "We are positioning the business for growth, resilience, and returns. We will return all excess cash flow after growth investments to shareholders."
Evercore ISI analysts, led by Amit Daryanani, highlighted Sandisk's impressive portfolio of long-term agreements totaling $93.9 billion, including contracts with three major data center operators in the U.S. This contract base became the foundation for a "buy" recommendation.
A wave of gains swept across Asia and the U.S.
The domino effect was immediate: Micron (MU) gained 4.2%, SK Hynix (SKHY) jumped 7.3%, and hard drive makers Seagate (STX) and Western Digital (WDC) rose 4.9% and 7.3%, respectively. On Friday, Asian indices picked up the baton: the Nikkei 225 rose 1.73%, the Topix gained 0.92%, and the KOSPI strengthened by 2.11%. The small-cap KOSDAQ index, which had previously shown resilience even during the downturn, also added 0.84%.
Notably, the KOSPI broke through the psychological 7000-point level for the first time in 15 trading sessions.
Skeptics warn against euphoria
However, not all market participants are ready to call the current rally the start of a sustainable long-term trend. Peter Kim of KB Securities attributes the previous decline more to technical factors and capital rotation than to a fundamental deterioration in the semiconductor industry's prospects. In his assessment, forced liquidation of credit positions is already subsiding. Jung In Yun of Fibonacci Asset Management Global took a more cautious stance: "I wouldn't call this a fully new bull market."
The index has gained more than 10% over five trading days ahead of the long weekend in South Korea, and foreign capital inflows could hold the 7000 level. Further momentum will depend on how long the optimism surrounding Sandisk's forecast can sustain other players in the memory sector.
My view: a 20% rise from the lows is a technical signal, but the fundamental base looks solid thanks to structural demand for AI solutions and memory. However, investors should remember that volatility in this sector is the norm, and the current momentum does not guarantee a linear upward move. The key test will be holding levels after a correction.