On July 23, 2026, the Korea Composite Stock Price Index (KOSPI) surged sharply, climbing more than 3% intraday and reclaiming the 7,000-point threshold. As of the session, KOSPI stood at 7,042.08, up 3.6%. The semiconductor sector was the main driver behind this rally—SK Hynix soared nearly 5% intraday, while Samsung Electronics gained over 4%. These two memory chip giants played a pivotal role in pushing the index back above this key level.
This rally is not an isolated event. Against the backdrop of expanding global investment in AI computing infrastructure, South Korea—at the heart of the global memory chip supply chain—is undergoing a value re-rating driven by structural demand.
How AI Giants’ Capital Expenditure Expansion Impacts the Korean Stock Market
The immediate catalyst for the Korean market’s strong performance on July 23 was Alphabet’s after-hours earnings report in the US. Alphabet not only delivered better-than-expected quarterly results—with Q2 revenue up 24% year-on-year to $119.8 billion, and Google Cloud revenue soaring 82% thanks to demand for AI infrastructure and enterprise AI solutions—but, crucially, the company raised its full-year 2026 capital expenditure guidance from $180–190 billion to $195–205 billion. During the earnings call, executives made it clear: "We remain in a supply-constrained environment," with robust demand from both external cloud customers and internal needs.
Global capital markets quickly interpreted this as clear evidence that investment in AI computing infrastructure is far from peaking. Alphabet isn’t alone. Morgan Stanley recently raised its 2026 capital expenditure forecast for major US tech giants from $433 billion a year ago to $805 billion, with expectations for 2027 reaching $1.1 trillion. The AI computing arms race has evolved beyond GPU procurement into a systemic capex cycle encompassing HBM memory, DRAM, NAND, advanced packaging, data center CPUs, optical interconnects, and power equipment.
For the Korean stock market, the significance is clear: every dollar of AI capex from global tech giants ultimately translates into substantial demand for memory chips—and the world’s most advanced memory chip capacity is highly concentrated in just two Korean companies, Samsung Electronics and SK Hynix.
From AI Compute to Memory Chips: The Key Demand Transmission Pathway
To understand the correlation between KOSPI and AI capital expenditure, it’s essential to clarify how investments in computing power translate into memory chip demand.
AI servers have fundamentally different storage architectures from traditional data centers. Industry forecasts indicate that by 2026, AI-related DRAM demand will account for over 53% of the total. Both AI training and inference are driving exponential growth in demand for high-bandwidth memory (HBM), server DRAM, and enterprise SSDs. HBM, designed specifically for AI chips, has become a critical bottleneck for AI computing supply. As early as October 2025, Samsung, SK Hynix, and Micron all disclosed that their next-generation HBM production capacity for 2026 was essentially sold out; by Q1 2026, all three manufacturers’ HBM capacity had been fully booked.
Structural supply constraints are also significant. HBM requires roughly 2.5 to 3 times more wafer capacity per bit than standard DDR5. This means every additional wafer allocated to HBM reduces available capacity for general-purpose DRAM. According to TrendForce, HBM wafer input as a share of total DRAM input by the three major manufacturers rose from about 18% in 2025 to 22% in 2026, and could reach 30% in 2027. As high-end products continue to occupy more capacity, the effective supply of general DRAM is structurally compressed, extending the upcycle for the entire memory industry.
In this supply-demand context, memory chip prices have entered a sustained upward trajectory. In the first half of 2026, the global memory chip industry is experiencing its strongest upcycle in 15 years, with DRAM and NAND contract prices rising sharply for two consecutive quarters. TrendForce expects traditional DRAM contract prices to rise by 13–18% quarter-over-quarter in Q3 2026, while NAND flash contract prices are projected to increase by 10–15%. UBS has further raised its outlook, forecasting DDR contract prices to rise another 32% in Q3 after a 67% surge in Q2.
How the Memory Chip Supercycle Is Reshaping Industry Profit Expectations
Rising prices are translating directly into improved profitability for memory chip manufacturers. With capacity stretched and pricing power shifting to suppliers, market expectations for Samsung Electronics and SK Hynix’s earnings continue to rise.
The scale of capex expansion reflects companies’ confidence in future demand. Samsung Electronics plans to invest over KRW 110 trillion (about $73.3 billion) in 2026 (including R&D), surpassing KRW 100 trillion for the first time, and has stated that memory business capex will increase significantly in 2026. SK Hynix’s capex was about KRW 30.2 trillion ($25.6 billion) in 2025 and is expected to remain high in 2026. Consensus estimates put SK Hynix’s capex at $31 billion in 2026, rising to $37.5 billion in 2027 and $44 billion in 2028—well above the previous decade’s peak annual capex of around $15 billion.
These expansion plans are not short-term moves but are based on expectations of long-term, structurally driven growth in AI memory demand. Samsung Group has committed KRW 265.5 trillion in investments in Korea, including KRW 245 trillion from Samsung Electronics between 2026 and 2040, with KRW 210 trillion allocated to semiconductors. SK Group has announced a total investment of KRW 21 trillion. These investments span the entire supply chain, from wafer fabs and HBM production lines to advanced packaging.
Korea’s Unique Position at the Heart of the Global Semiconductor Supply Chain
Korea’s stock market is highly sensitive to the AI capex boom, rooted in the country’s irreplaceable role in the global semiconductor supply chain.
According to Yole, in 2024, global DRAM and NAND combined monthly capacity was about 3.2 million wafers, with Korea accounting for roughly 45%, mainland China 24%, and Taiwan 16%. Memory manufacturing remains highly concentrated in East Asia, with Korea holding the largest single-country share. In HBM—a core AI memory segment—Korean companies’ dominance is even more pronounced: Samsung and SK Hynix together control more than 80% of the global HBM market.
This industrial position is reflected directly in Korea’s trade data. From July 1 to July 20, 2026, Korean exports totaled $54.9 billion, up 52.3% year-on-year—a record high for the period. Semiconductor exports surged 180.6% to $22.1 billion, accounting for 40.3% of total exports. From the start of the year to July 20, Korea’s cumulative trade surplus reached $149.9 billion—5.4 times the surplus for the same period last year and nearly double the full-year surplus for 2025. These figures clearly show that AI-driven memory chip demand is now the primary engine of Korea’s export growth.
Foreign Capital Inflows and Sentiment Recovery: A Synchronized Validation
KOSPI’s rally on July 23 reflected not only fundamental strength but also strong capital flows.
According to the Korea Exchange, net foreign buying reached KRW 326.4 billion on the day. The previous trading day, overseas investors net bought KRW 2.6 trillion in the securities market, including KRW 1.7 trillion in the semiconductor sector—the largest single-day net inflow since May 6. The large-scale return of foreign capital indicates that global investors are repricing Korean semiconductor assets within the AI cycle.
Sector-wise, the electrical and electronics sector led KOSPI with a 4.43% gain, while manufacturing, large-cap blue chips, utilities, and information technology also strengthened. On the day, Samsung Electronics closed at KRW 271,250, up 4.13%, and SK Hynix at KRW 1,917,000, up 4.75%. The broad-based rally in tech blue chips reflects growing market consensus that Korea’s semiconductor supply chain stands to benefit most from the expansion of AI capex.
Balancing Continued Upcycle and Potential Risks
Despite the prevailing optimism, it’s important to objectively assess the structural risks facing the industry.
On the demand side, AI-driven memory demand shows no signs of slowing. TrendForce expects a 4–5% supply gap for NAND in 2026, with shortages likely to persist until the second half of 2027. As Intel and AMD’s next-generation server platforms ramp up in late 2026, global server shipments are projected to grow 17% for the year, further boosting memory demand. Nomura Securities believes the core issue for the global memory industry remains severe supply shortages, with AI-driven structural demand growth yet to peak.
However, risks shouldn’t be ignored. While Alphabet raised its capex guidance, it also reported negative cash flow for the first time in its history, and its stock fell more than 3% after hours. Massive AI capex is putting pressure on tech companies’ free cash flow, and if future returns fall short of expectations, major players may adjust their investment pace. Additionally, if Samsung and SK Hynix’s large-scale capacity expansions come online simultaneously, the supply-demand balance could shift in the medium term. However, given HBM’s continued encroachment on general DRAM capacity and the long-term structural nature of AI demand, the likelihood of a traditional cyclical oversupply appears low for now.
Conclusion
KOSPI’s surge of over 3% on July 23, 2026, reclaiming the 7,000 mark, was directly catalyzed by Alphabet’s better-than-expected capex guidance. The deeper driver, however, is the sustained pull of global AI infrastructure investment on memory chip demand. As the world’s core memory chip producers, Samsung Electronics and SK Hynix are positioned to benefit most directly from this structural trend.
From the macro narrative of AI capex, through the micro transmission of memory chip supply-demand gaps, to the synchronized confirmation in Korea’s trade data, this KOSPI rebound is supported by fundamentals, capital flows, and industry dynamics. The memory chip industry is undergoing a paradigm shift from traditional cyclical swings to long-term, structurally driven AI demand—a shift whose duration and depth will largely determine the revaluation potential of Korea’s semiconductor supply chain.
For investors focused on the global tech supply chain, the evolving role of Korea’s semiconductor sector in the AI capex cycle will remain a central theme worth tracking for the foreseeable future.
FAQ
Q1: What was the direct cause of KOSPI’s rally on July 23?
The immediate trigger was Alphabet’s better-than-expected earnings report and the upward revision of its 2026 full-year capex guidance to $195–205 billion. The market interpreted this as a signal that AI infrastructure investment will continue expanding, boosting demand expectations for Korean memory chip manufacturers.
Q2: Why did SK Hynix and Samsung Electronics outperform the overall KOSPI?
SK Hynix and Samsung Electronics are the world’s leading suppliers of memory chips—especially HBM, which is critical for AI. A significant portion of every AI capex dollar ultimately turns into memory chip purchases, and these two companies together hold over 80% of the global HBM market. As a result, positive AI investment sentiment is reflected most directly and intensely in their stock prices.
Q3: How long can the uptrend in memory chip prices last?
According to TrendForce and other research firms, the global memory chip industry is experiencing its strongest upcycle in 15 years in the first half of 2026. TrendForce expects the NAND supply shortage to persist until the second half of 2027. However, the exact duration will depend on the sustainability of AI capex and the pace of capacity expansion by major manufacturers.
Q4: What is Korea’s position in the global AI supply chain?
Korea is the world’s center for memory chip manufacturing, accounting for about 45% of global DRAM and NAND monthly capacity. In the AI-specific HBM segment, Samsung and SK Hynix together control more than 80% of the market. In the first 20 days of July 2026, Korea’s semiconductor exports grew 180.6% year-on-year, accounting for 40.3% of total exports.
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