Temasek's first Korea bet lifts KOSPI 5% on chip valuation call

The KOSPI surged 5% on Wednesday after Temasek, in its first foray into South Korean equities, bought shares of Samsung Electronics and SK Hynix.

The Singapore sovereign wealth fund contacted the South Korean government to discuss the timing of its capital deployment, a South Korean financial authority official said, after Seoul approved single-stock leveraged ETFs that had driven sharp swings in the two chipmakers' shares. Temasek chose to invest directly through internal staff rather than entrust external asset managers, the official added.

Samsung Electronics and SK Hynix each rallied more than 8% in Seoul trading, extending a climb that has lifted both stocks more than 880% from last year's trough. In Hong Kong, the XL2CSOPHYNIX and XL2CSOPSMSN leveraged products tracking the two companies surged more than 16%. Goldman Sachs maintains its KOSPI target at 12,000, a level that implies further gains for the benchmark.

Temasek's endorsement could draw additional foreign capital into the KOSPI and narrow the valuation gap between Korean memory makers and global AI peers, which the fund views as among the most undervalued segments of the artificial-intelligence value chain. The benchmark's advance contrasted with a cautious session across Asia, where Brent crude held near $89 a barrel and gold traded above $4,400 an ounce.

The rally in Korean memory names comes as CLSA said the recent listing of Chinese chipmaker CXMT has limited fundamental impact on South Korean memory stocks, though it poses a long-term challenge to market share. The KOSPI's jump also outpaced the broader region, where the S&P 500 fell 0.32% overnight and the Nasdaq dropped 0.60% on technology weakness, with Alphabet under pressure.

High-bandwidth memory has become the most contested segment of the chip industry, with SK Hynix supplying Nvidia's AI accelerators and Samsung racing to close the gap. The two Korean makers, together with Micron Technology, control the bulk of global DRAM supply, giving them outsized exposure to the AI buildout that has driven the 880% rebound from last year's trough.

For investors, the question is whether Temasek's entry marks the start of a sustained foreign bid for Korean semiconductors or a one-off position. The fund's direct-investment approach and its stated view that chip stocks remain undervalued within the AI supply chain suggest it expects further upside, even after the 880% run from the trough. A resolution of the Strait of Hormuz standoff, which has kept Brent near $90, would ease cost pressure on Korean manufacturers and strengthen the case for continued foreign inflows.

The KOSPI's 5% jump on Wednesday ranks among its strongest sessions this year, driven by a single institutional decision rather than a broad macro event. That concentration of buying in two names leaves the benchmark exposed to profit-taking if Temasek's position is smaller than the market assumes, or if memory prices soften in the second half. Still, the fund's willingness to enter a market it had previously avoided reflects confidence in the durability of AI-driven demand for high-bandwidth memory, the segment where SK Hynix leads and Samsung is closing the gap.

This article is for informational purposes only and does not constitute investment advice.