South Korean Chip Giants Reach $1.11 Trillion Market Cap Amid AI Investment Surge

On February 3, the combined market capitalization of South Korea's two largest companies, Samsung Electronics and SK Hynix, reached $1.11 trillion. According to Jin10, this milestone highlights the shift of AI investment towards infrastructure, benefiting South Korean chip manufacturers at the core of the industry supply chain. South Korea has positioned itself as a key supplier to global industry leaders like Nvidia. Yiping Liao, a portfolio manager at Franklin Templeton Global Investment, noted that South Korea's focus on specific segments of the tech supply chain has driven the remarkable rise in stock prices for Hynix and Samsung. He attributed this to an unprecedented shortage cycle in memory chips. Simon Woo, head of Korea research at BofA Global Research in Seoul, predicts that the memory chip supercycle will continue until 2027. He stated that memory chips have become a strategic asset for U.S. tech giants, a significant shift from earlier cycles when they were considered disposable components for PCs and smartphones. This change has elevated the status of the memory industry. Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, expects the semiconductor sector to contribute approximately 60% of the anticipated earnings growth for South Korean stocks this year.