South Korean semiconductor stocks rise following Micron's positive earnings report.

      South Korean semiconductor stocks soared on Thursday following Micron Technology's announcement of record quarterly results and a positive outlook, rekindling optimism that the demand for AI memory will remain strong into next year. The KOSPI index increased by approximately 4.1%, driven primarily by the country's two memory manufacturers, which together constitute over 55% of the index.

      Samsung Electronics saw a rise of 5.3%, reaching 358,500 won, while SK Hynix, the smaller yet now more valuable of the two, surged by 9.2% to 2.818 million won, as reported by Reuters. The advance was led by foreign investors, reversing two days of weakness in the chip sector in just one session.

      The boost originated from across the Pacific, with Micron, the largest U.S. producer of computer memory and a crucial supplier to Nvidia, announcing fiscal Q3 revenue of $41.46 billion for the period from March to May, significantly exceeding the approximately $35.84 billion that analysts surveyed by LSEG had predicted. The company projected fourth-quarter revenue above Wall Street expectations and indicated that demand for AI memory would maintain a tight supply until at least 2027. This outlook was interpreted in Seoul as a positive sign for the order books of the two leading memory manufacturers.

      Additionally, SK Hynix had another reason for its increase. The day before, the company filed plans to raise up to 45.45 trillion won (about $29 billion) via a Nasdaq listing of American depositary receipts, tentatively set for July 10. If realized, this deal would be the largest ADR offering on record, surpassing Alibaba’s $21.8 billion raised in 2014, with all proceeds designated for chip capacity instead of shareholder returns or debt.

      This listing follows SK Hynix surpassing Samsung in market value based on common stock, marking the first shift at the top of the Korea Exchange since November 2000. Samsung had its own motivating factor, albeit a less vigorous one. Local media reported that the company is contemplating a share buyback of up to 90 trillion won (approximately $58.6 billion) to finance employee stock bonuses from recent wage negotiations. Samsung stated no decision had been made regarding the timing or size of the buyback and will provide updates in a month. This potential figure boosted market sentiment even without board approval.

      The positive momentum extended throughout Asia, with the Nikkei in Tokyo climbing about 4%, primarily led by equipment and memory stocks that support the same demand. Chip testing company Advantest soared by 11.4%, Tokyo Electron rose by 7.8%, and memory manufacturer Kioxia gained 8.8%, as investors reacted to the implications of Micron’s financial performance across the broader supply chain. Analysts noted a blend of strong fundamentals and a fear of missing out.

      At the core of this activity was high-bandwidth memory, the stacked DRAM that powers Nvidia’s accelerators and now offers the highest profit margins in the industry. SK Hynix is the primary supplier and has transformed that advantage into the most robust earnings among Korean firms. Samsung, which is still validating its own HBM for Nvidia and is expected to secure a larger portion of next-generation HBM4 orders, has been trying to catch up during the same period. Micron’s results, interpreted in Seoul, indicated that the demand propelling both companies forward has not yet reached its peak.

      However, the concentration that fueled Thursday’s surge poses a dual-edged risk. With Samsung and SK Hynix comprising over half of the KOSPI’s value, a strong quarter from a U.S. counterpart can elevate the entire index while a weak quarter in memory demand can pull it back down. Over the past year, the market has perceived this risk as minimal, banking on continued spending from hyperscalers to maintain the memory supercycle.

      For now, investors are betting that this trend will persist. SK Hynix has secured its high-bandwidth memory capacity through 2026, with shortages anticipated into 2027, and Micron has just relayed a similar message from its side of the exchange. The upcoming challenge will be procedural rather than narrative: the pricing of SK Hynix's ADR on July 10 and Samsung's decisions regarding its buyback in the weeks following. Thursday addressed the sentiment but did not resolve the question of the cycle.