Samsung Electronics and SK Hynix fell sharply on Friday as a selloff in US chip stocks spilled into South Korea, raising fresh questions about the country's heavy dependence on the artificial intelligence boom. The KOSPI opened 3.66% lower and later dropped as much as 5.7%, prompting the Korea Exchange to trigger a sell-side sidecar that briefly suspended programme trading.
South Korea's AI-fueled rally has made it the world's sixth-largest stock market, and the rally may be far from over. Investors may want to keep South Korea ETFs on their radar.
In previous decades, South Korea has always been a cultural and financial afterthought after Japan, with its dominance in electronics and engineering through companies like Sony, Toyota, JVC, Honda, and Mitsubishi; and China, with its enormous low cost manufacturing, geopolitical and military clout, and expanding middle class prosperity.
Korea has gone mad for AI. Capital-M Mad, the kind that turns a niche 3x leveraged country fund into the most-watched ticker on Korean retail brokerage screens.
The AI trade is hot, and it could stay hot for quite some time. Undoubtedly, much of the strength has been concentrated in the storage and memory stocks.
Just over three years ago, you wouldn't have thought that the South Korean stock market would be such a source of profound strength as the AI boom took off and things like storage and memory chips started seeing demand overwhelm supply.
South Korea's KOSPI has gone from emerging-markets afterthought to the best major equity story of 2026, and the engine is sitting inside every advanced AI server on Earth.
Here's a fact that might shock you: the iShares MSCI South Korea ETF (NYSEARCA:EWY | EWY Price Prediction) has ripped 303.3% higher in U.S.
South Korean tech firm Kakao Corp said it has failed to reach a pay deal with its union after second-round negotiations mediated by the government on Wednesday.
South Korea is emerging as one of the strongest AI plays outside the United States. Semiconductor strength & AI optimism are driving KOSPI and South Korea ETFs.
South Korea's Kospi Index crashed by over 6% today, May 15, as the recent rally took a breather and investors started to book profits. After crossing the key resistance at 8,000 this week, it plunged to 7,585.
The iShares MSCI South Korea ETF (NYSEARCA:EWY | EWY Price Prediction) is up 80% year-to-date and about 200% over the past year, which is not what a country fund is supposed to do, especially one that spent a decade as the poster child for the “Korea discount.