Samsung, SK hynix power S Korea's 76% stock market surge

South Korea’s Kospi Index rose 76% in 2025, making it the world’s best-performing major stock benchmark.

Much of the gain came from Samsung Electronics and SK hynix, which together contributed nearly half of the index’s advance as demand for high-performance memory chips surged.

Proxy AI infrastructure firms such as Hyosung Heavy Industries and Doosan Enerbility each climbed over 330%, driven by demand for power to support data centers.

Defense stocks also jumped, with Hanwha Aerospace up nearly 200% and Hanwha Ocean up 210%.

On the downside, game developers like Krafton and Com2uS lost around 20% and over 33%, respectively, due to limited regional appeal.

EV supply chain firms, including Enchem and SK Innovation, also saw major declines as demand for EVs weakened.

🔗 Source: Bloomberg

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Implications, context, and why it matters.

Korean stocks gained in 2025 with fair valuations as earnings climb

The Korea Composite Stock Price Index (KOSPI) trades near 11.8x 12-month forward P/E and 1.34x 12-month trailing P/B 1. The five-year average forward P/E sits at 10.6x 1.
Analysts peg 2026 operating profit at ₩368 trillion (Korean won), up 30% year over year, led by semiconductors 1.
KOSPI reporters for third-quarter 2025 (3Q25) cover 28% of index market cap, and operating profit topped consensus by 12% 1. The figure was 3.6% without Samsung Electronics 1.
Korean firms lead major markets on earnings momentum, and cash flow is improving too 1.

Power grid bottlenecks open doors for data center builders

Focus on constrained zones with Korea Electric Power Corporation (KEPCO) system management substations, which face saturated capacity 2. Regulators issue Electricity Business Licenses (EBLs) only after grid upgrades, with East Coast links from July 2026 and Honam from January 2032 2.
Develop on-site generation and grid batteries in dispersed energy specialized zones, which allow local supply and direct contracts outside the centralized market 2.
Foreign investors face few limits in most power businesses, while nuclear has explicit restrictions, and KEPCO caps foreign voting rights at 3% 2.
Projects that plan to use 10 megawatts (MW) or more in those constrained areas must complete power grid impact assessments 2. A nationwide framework is in pilot and creates openings for consulting and mitigation work 2.