Korean Stock Market Outlook for 2026: Semiconductor Prosperity and Policy Support Take Center Stage

Economic Observer Network South Korea’s stock market and related funds have recently been influenced by multiple factors, including the semiconductor industry’s prosperity, corporate reform policies, and major company developments.

Recent Stock Trends

KOSPI Index Target: In a report from JPMorgan in February 2026, it is estimated that the KOSPI index could reach 7,500 points within the year, representing significant upside potential from current levels, mainly driven by the semiconductor industry boom and corporate reforms. The index first broke through 5,000 points in January 2026. Although there was a single-day drop of over 5% on February 6, overall, it remains strong.

Recent Events

Chip Act Enacted: The South Korean National Assembly passed the “Special Act on Strengthening and Supporting Semiconductor Industry Competitiveness” on January 29, 2026. The law is expected to take effect as early as the third quarter of 2026, providing institutional support for the semiconductor supply chain. Corporate Value Enhancement Plan: The South Korean government continues to promote the “Value Enhancement Plan,” aimed at improving corporate governance and shareholder returns. In 2025, the scale of share buybacks and dividends by listed companies reached record highs, and this trend may continue into 2026.

Company Status

Samsung Electronics: The company plans to implement a stock price-linked employee compensation scheme from October 2025 to 2028, which may impact market sentiment. Additionally, its Q4 2025 performance guidance shows a significant year-over-year increase in operating profit. SK Hynix: Achieved a record high in FY2025 performance and announced additional dividends; the company expects demand for HBM (high-bandwidth memory) to remain strong, with capacity expansion plans in 2026 attracting attention. LG Energy Solution: In 2026, the strategic focus is on expanding energy storage battery production, aiming to increase North American capacity to over 60 GWh, and plans to launch new products such as lithium iron phosphate (LFP) batteries within the year. Hyundai Motor Group: Beijing Hyundai plans to launch four new energy vehicle models between 2026 and 2027, covering pure electric and hybrid technologies.

Industry Policy Status

South Korea Central Bank Policy: The central bank maintained the base rate at 2.5% for the fifth consecutive time in January 2026. Future meetings may continue to cautiously balance economic recovery and inflation risks. National Pension Service (NPS) Asset Allocation Adjustment: NPS plans to reduce overseas stock investments by approximately $20 billion in 2026 and increase domestic allocations, which could impact market liquidity.

The above content is compiled from publicly available information and does not constitute investment advice.