Korea’s AI Chip Market: Global Stocks’ Opening Bell
Korea’s AI chip market is now setting the global stocks agenda, with its correlation to the Nasdaq 100 nearly tripling in the past 60 days. This shift has even prompted JPMorgan’s Asia strategist to present on Korea to their global team for the first time in 14 years.
Key Takeaways:
- Global Influence: Fund managers worldwide are now incorporating South Korean stocks into their daily routines, as the market offers an early indicator of global AI risk appetite.
- Market Correlation: The Kospi and Nasdaq 100’s correlation has reached 0.46, marking a significant increase from its five-year average of 0.16. This linkage is particularly strong during market downturns.
- SK Hynix’s Impact: SK Hynix’s US-listed shares extend Korea’s influence into Wall Street hours, with investors closely tracking Seoul and the ADRs.
- Volatility Concerns: The Kospi has become one of the world’s most volatile major benchmarks due to leveraged single-stock products. A recent selloff triggered a 9% drop in the Kospi, which affected SK Hynix’s US shares.
- South Korea’s Investment: South Korea has committed $880 billion over a decade to chips, AI data centers, and robots, with Samsung and SK Hynix controlling most of the global memory chip supply.
- Sentiment-Driven Trading: As long as the supply bottleneck persists, Korea’s sentiment-driven trading will continue to set the tone for AI-related stocks worldwide.
Quote:
"This is the new normal investors have to accept, as long as the AI rally continues," said Chisa Kobayashi at UBS.
The Next Web’s Cristian Dina authored this insightful piece, highlighting the significant impact of Korea’s AI chip market on global stocks and the broader tech industry.