Why Korea’s Market Rally May Be More Than a Semiconductor Trade

AI-driven chip earnings and governance reforms are reshaping Korea’s long-standing valuation discount.

South Korea’s equity market has rarely moved with such force. In 2025, the KOSPI surged roughly 80% in USD terms, reversing its position from one of Asia’s weakest markets in 2024 to one of the world’s strongest performers. By early 2026, the index had crossed 6,300 for the first time, propelled by a powerful combination of AI-driven semiconductor demand, earnings upgrades and a broadening political push to dismantle the long-standing “Korea discount”.