KOSPI enters bull market phase: rally in chip giants lifts index by more than 20%
The South Korean stock index KOSPI has confidently returned to bull market territory, showing a gain of more than 20% from July lows. The key driver of this impressive recovery was a powerful rally in the semiconductor memory manufacturing sector, which set the tone for the entire Asian market.
The catalyst for the turnaround was a strong long-term outlook from the American company Sandisk (SNDK). On Thursday, shares of the flash memory maker jumped 13.7% after management presented an ambitious growth strategy through 2030. Expectations of mid- to high-double-digit revenue growth, combined with maintaining an adjusted gross margin of around 80%, clearly impressed investors. Chief Financial Officer Luis Visoso also reaffirmed the intention to return all excess cash flow to shareholders after growth investments, adding to the optimism.
A wave of optimism swept across the entire sector
The positive signal from Sandisk quickly spread to related companies. Shares of Micron (MU) rose 4.2%, while shares of South Korean giant SK Hynix (SKHY) gained 7.3%. Hard drive makers Seagate (STX) and Western Digital (WDC) also closed the day in positive territory, rising 4.9% and 7.3%, respectively. Notably, analysts highlighted new long-term contracts for Sandisk totaling $93.9 billion, including agreements with three major U.S. data center operators, which forms a solid foundation for sustainable growth.
Asian markets moved higher in unison
On Friday, the upward momentum continued across Asian exchanges. Japan's Nikkei 225 rose 1.73%, the Topix index added 0.92%, and the KOSPI gained 2.11%, breaking through the psychologically important 7000-point level for the first time in 15 trading sessions. Even the small-cap KOSDAQ index, which had recently shown resilience in a falling market, rose 0.84%.
Sustainability of the bull trend in question
However, not all market participants share the widespread optimism. A number of experts, including Peter Kim from KB Securities, attribute the previous decline more to technical factors and capital flows rather than deteriorating fundamentals. Nevertheless, he notes that the wave of forced liquidation of credit positions is already subsiding. Jeong In Yun from Fibonacci Asset Management Global urges caution, not considering the current rally a full-fledged new bull market.
My expert assessment: The market is clearly re-rating the prospects of the memory sector, and fundamental demand from AI infrastructure is indeed strong. However, such a rapid 20% surge in a short period often precedes a correction. Investors should closely watch whether Sandisk and other chipmakers can confirm their ambitious forecasts with actual financial results in the coming quarters. For now, foreign capital inflows may keep the KOSPI above the 7000 level, but the long-term sustainability of this level raises certain doubts for me.