The South Korean chip sector reaches a milestone of $1.11 trillion amid AI expansion

Global investment in artificial intelligence is transforming technology markets, and no sector feels the impact more than the semiconductor industry. The two leading South Korean companies in the field, Samsung Electronics and SK Hynix, together hold a market capitalization of $1.11 trillion, a feat that reflects how chip manufacturers have become strategic players in the global supply chain.

AI demand redefines the value of memory chips

The change is radical. According to Jin10 analysis, memory chips have ceased to be mere interchangeable components and have become strategic assets of primary importance. While in previous cycles these semiconductors were considered standard inputs for personal computers and mobile devices, today they represent the critical bottleneck for American tech giants competing for AI supremacy.

Yiping Liao, portfolio manager at Franklin Templeton Global Investment, attributes the spectacular rise in Hynix and Samsung stock prices to a specific factor: the unprecedented shortage of memory chips. “South Korea controls very specific segments of the tech supply chain, giving them a unique competitive advantage,” he comments. Companies like Nvidia critically depend on South Korean semiconductors to develop their solutions.

Samsung and SK Hynix strengthen their position as strategic suppliers

BofA Global Research analysts in Seoul, led by Simon Woo, go further. They project that the memory chip supercycle will extend until 2027, suggesting that shortages and high prices will persist for several years. This timeframe reflects the magnitude of ongoing changes.

Timothy Moe, equity strategist for Asia-Pacific at Goldman Sachs, offers another revealing perspective: the semiconductor sector will contribute approximately 60% of the expected earnings growth for South Korean stocks this year. This is not a marginal phenomenon but the main driver of the country’s economic performance.

A future dominated by chip shortages and strategic dependence

The transformation is profound. Memory chips are no longer treated as fungible commodities but as strategic resources that define global technological competition. South Korea, positioned at the core of this value chain, directly benefits from this geopolitical shift.

With a demand supercycle that could extend until 2027 and analysts projecting sustained growth, the outlook for South Korean chip giants appears solid in the short and medium term.