Ends at 6,579, up 3.7%
Foreign investors buy a net 3.4 trillion won of shares, led by semiconductors
Wall Street is increasingly backing away from its skepticism that "chipflation" — a sharp rise in semiconductor prices — would curb demand for artificial intelligence spending. Companies are bringing forward AI investment despite higher memory prices, and neo-cloud providers are raising capital expenditures on top of spending by Big Tech. With market positioning also improving after helping drive the recent selloff in technology shares, expectations are reviving for South Korea's stock market, a major beneficiary of AI infrastructure investment.
The Kospi 200 closed at 6,579.04 on Aug. 12, up 3.68%. It reclaimed its 20-day moving average for the first time in more than a month. Foreign investors led the rally, buying more than 3.4 trillion won of shares on a net basis, mainly in electrical and electronics names including semiconductors. The Kosdaq also recovered from an early decline to close up 0.12% at 858.91.
Samsung Electronics Co. and SK Hynix Inc., which led the market higher, surged 6.7% and 5.5%, respectively. Buying was also strong in AI infrastructure plays, including semiconductor substrates, materials, parts, equipment and power gear. Investor sentiment improved after CoreWeave Inc. and Super Micro Computer Inc. reported overnight results showing revenue, margins and backlog far ahead of market expectations, while also raising their capital spending outlook for this year.
CoreWeave's conference call helped ease recent concerns that demand for AI chips had passed its peak. Asked whether it would expand long-term supply agreements across the supply chain, including memory, management said it was aggressively managing suppliers to secure capacity in time for customers' needs. It added that the value created by computing was rising faster than costs. Margins on recently signed contracts were also 5 to 10 percentage points higher than in the previous quarter.
News that Situational Awareness, an AI-focused hedge fund, had sharply increased its stake in Japan's Taiyo Yuden Co. also supported sentiment. Taiyo Yuden makes high-performance multilayer ceramic capacitors used in AI data centers. Its shares jumped 7.5% in Japan on Aug. 12.
Wall Street has also been reversing calls that rising prices for AI hardware components, led by memory, would suppress demand. Morgan Stanley analyst Erik Woodring upgraded his view on the U.S. information-technology hardware sector to neutral from cautious on Aug. 10. In late June, he had warned that chipflation would weaken corporate IT spending and urged caution on AI infrastructure names such as server and storage makers. This time, he acknowledged that call was wrong.
Trading conditions are also improving in ways that could allow stronger fundamentals to feed through to stock prices. Scott Rubner, Citadel Securities' head of equity derivatives strategy, wrote in a report the previous day that deleveraging was largely complete. As volatility declines, systematic funds also have more room to buy equities again.
South Korea's stock market is especially sensitive to those shifts because it is a high-beta market for AI semiconductors and infrastructure investment. With chipmakers accounting for a large share of the benchmark, foreign flows and the broader market tend to swing sharply with global sentiment toward AI spending. That is reviving expectations for a rebound in South Korean equities as confidence in AI investment improves.
Bin Nan-sae, Korea Economic Daily reporter binthere@hankyung.com