South Korea’s benchmark KOSPI index soared past the 7,000 mark for the first time on Wednesday, powered by a strong rally in artificial intelligence-linked semiconductor stocks that also lifted Samsung Electronics into the $1 trillion market-cap club. The index closed 6.45% higher at 7,384.56 after briefly hitting an intraday record of 7,426.60, while also triggering a rare “sidecar” trading curb during volatile trade. The surge followed gains in U.S. chip stocks overnight, with the Philadelphia Semiconductor Index rising 4.2%, boosting investor sentiment across global markets.

Leading the rally were Samsung Electronics and SK Hynix, which jumped 14.4% and 10.6% respectively to record highs. Together, the two companies now account for nearly 44% of the KOSPI’s total market capitalization. Samsung’s valuation crossing $1 trillion makes it only the second Asian firm after Taiwan Semiconductor Manufacturing Company to reach the milestone.

The market rally reflects growing global demand for AI infrastructure and semiconductor chips, which has driven South Korea’s tech-heavy index to become one of the world’s best-performing major markets this year. The gains also followed strong manufacturing data and continued optimism around semiconductor exports.

So far in 2026, the KOSPI has surged 75%, following a 76% rise in the previous year, marking its strongest performance since 1999. Analysts attribute the rally to sustained foreign investment inflows and government-led market reforms aimed at boosting investor confidence. The South Korean won also strengthened sharply, reaching its highest level since February, reflecting increased capital inflows.

Market sentiment was further supported by upbeat earnings forecasts from global technology firms such as Advanced Micro Devices, which reported strong demand for AI-driven data center chips. Despite broad gains, most stocks in the index declined, highlighting the concentrated nature of the rally. However, financial and securities sectors also posted solid gains on expectations that a booming equity market will lift earnings.

Analysts remain divided on the outlook, with some suggesting the index could continue rising if AI chip demand remains strong, while others warn of potential volatility if global economic conditions weaken. Foreign investors played a key role in the rally, recording their largest-ever single-day net purchases of South Korean equities, further fueling the historic market surge.