KOSPI enters a bull market phase: the chip sector recovery gave the index +20%
South Korea's KOSPI stock index has confidently returned to bull market territory, posting a gain of more than 20% from July lows. The key driver of this reversal has been the powerful recovery of memory semiconductor manufacturer stocks, once again confirming the dominant role of the chip sector in the structure of Asian capital markets.
Sandisk (SNDK) shares provided particular momentum to the rally, surging 13.7% on Thursday following the publication of the company's ambitious long-term strategy. On Friday, the positive momentum continued in Asian markets, cementing the upward trend.
Sandisk Strategy: Betting on Double-Digit Growth
Sandisk shares closed at $1528.11 after top management presented a development plan through 2030. The company forecasts mid- to high-double-digit revenue growth while maintaining adjusted gross margin at around 80%. Chief Financial Officer Luis Visoso also announced a capital return program to shareholders, emphasizing that all excess cash flow after investments would be directed to investors.
Evercore ISI analysts highlighted Sandisk's new long-term contracts totaling $93.9 billion, including agreements with three clients operating large data centers in the United States. This contract base became the foundation for the "buy" recommendation.
Wave of Growth Swept Across the Entire Sector
The recovery was not limited to a single company. Micron (MU) shares rose 4.2%, while SK Hynix (SKHY) gained 7.3%. Hard drive manufacturers Seagate (STX) and Western Digital (WDC) also posted gains of 4.9% and 7.3%, respectively. On Friday, the upward momentum swept through Asia: Japan's Nikkei 225 rose 1.73%, Topix gained 0.92%, and KOSPI strengthened 2.11%, breaking through the 7000-point mark for the first time in 15 trading sessions. The KOSDAQ small-cap index, which remained resilient even during the recent downturn, also rose 0.84%.
Sustainability of the Bull Trend in Question
However, not all market participants are ready to call the current rally the beginning of a long-term reversal. Peter Kim of KB Securities attributes the previous decline more to technical factors and capital flows rather than deteriorating fundamentals among semiconductor manufacturers. In his assessment, forced liquidation of credit positions is already subsiding. Meanwhile, Jeong In-yun of Fibonacci Asset Management Global urges caution, noting that he "wouldn't call this a fully new bull market."
The index 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 dynamics will depend on how long the optimism surrounding Sandisk's forecasts can support the rest of the memory sector companies.
My view: The current rally is a classic example of a recovery after oversold conditions, reinforced by strong corporate news. However, the sustainability of the bull market will be determined not so much by one-off forecasts as by real demand for memory from AI infrastructure. If Sandisk's contract base reflects a systemic trend rather than a one-time stroke of luck, the sector has every chance of consolidating at new levels. For now, investors should remain cautious and watch quarterly reports.