Stocks of South Korean semiconductor materials, components, and equipment companies are rallying broadly. Doubts over the growth of global artificial intelligence (AI) infrastructure investment have partly eased, while demand for products made by domestic materials and equipment companies is expected to rise over the long term under the government's three mega-projects. The government's series of policies to strengthen the competitiveness of the KOSDAQ market is also cited as a driver of the stock gains.
According to the Korea Exchange, as of 11:03 a.m. on the 10th, chip equipment company Jusung Engineering was trading at 191,400 won, up 7.29% from the previous session. Wonik IPS, the seventh-largest company by market capitalization on the KOSDAQ, was surging 15.35%, while eighth-ranked Leeno Industrial was up 7.57%. PSK (20.24%), EO Technics (10.22%), and Eugene Technology (10.82%) also posted steep gains.
As concerns over the growth of global AI infrastructure investment partly eased, investment demand appears to be flowing into companies within the semiconductor value chain. Overnight in the U.S. market, semiconductor stocks surged, sending the Nasdaq Composite up 1.30%, with all three major stock indexes rising. Micron Technology rose 4.5% after announcing a plan to invest more than $250 billion by 2035 to meet growing AI demand, while Meta gained 4.7%.
The gains are also seen as reflecting expectations for the three mega-projects, under which domestic companies are making large-scale investments in key advanced industries. On the 29th of last month, the government announced that about 1,500 trillion won in corporate investment is planned for the three mega-projects, covering semiconductors, AI data centers, and physical AI. For new semiconductor investment, Samsung Electronics and SK hynix decided to invest a combined 800 trillion won, with 400 trillion won each, in the Honam region to build a total of four memory chip production plants (fabs). As semiconductor facility investment proceeds, demand for materials, components, and equipment will also increase, potentially lifting related companies' earnings over the medium to long term.
The government's package of policies to strengthen the KOSDAQ market's competitiveness is also cited as a cause of the stock gains. The government plans to raise the market capitalization threshold for maintaining a KOSDAQ listing to 20 billion won from the current 15 billion won, and to apply delisting requirements to so-called "penny stocks" trading below 1,000 won. The government also announced a plan to divide the KOSDAQ market into premium and standard (tentative name) segments to create a market structure centered on quality companies.
Meanwhile, the KOSDAQ index was at 835.72 on the day, up 41.72 points, or 5.25%, from the previous session. The KOSPI also rose 250.15 points, or 3.43%, to 7,542.06, breaking back above the 7,500 mark.
