South Korean Tech Stocks Rally on Gains in AI-Related Names — Update

By Kwanwoo Jun

South Korean technology stocks rallied on gains in major artificial-intelligence-related names, sending the benchmark Kospi index to a record close.

The Kospi finished 2.5% higher at 8047.51 on Tuesday, just off an intraday high of 8131.15. The index was more than 3% higher for most of the session before paring gains in late trading.

SK Hynix, a supplier of high bandwidth memory for AI-chip titan Nvidia, was among the top gainers, rising 5.7%. Shares of the South Korean memory-chip maker surged past the 2 million won mark--equivalent to about $1,322--for the first time after the company introduced new integrated cooling elements to dissipate heat from HBM products. The company said that the solution reduced thermal resistance by 30% to ensure stable chip operations under high-temperature and high-pressure environments.

Expectations of strong AI-driven demand for chip-packaging substrates and multilayer ceramic capacitors also sent shares of relevant suppliers sharply higher.

LG Innotek surged 24% and Samsung Electro-Mechanics advanced 17% as analysts reiterated their upbeat earnings outlooks on the companies.

Apple supplier LG Innotek is likely to benefit from its leadership in semiconductor packaging substrate technologies for mobile devices, radio frequency-system in package and flip chip-chip scale package, Daiwa Capital's S.K. Kim said, noting that RF-SiP accounts for 40%-50% of its total substrate revenue.

The South Korea-based company is also seeking new business opportunities in its flip chip-ball grid array substrate used in AI accelerators and personal computers, the analyst said. Kim pointed to the company's forecast for its FC-BGA business to turn profitable in 2027, two years ahead of schedule.

Daiwa raised its 2026-2027 earnings-per-share estimates for LG Innotek by 11%-24%.

KB Securities analysts C.M. Lee and Yeonsoo Kim said they expect Samsung Electro-Mechanics' revenue and earnings to surge in the coming years, driven by explosive demand for multilayer ceramic capacitors and higher-end substrates used in AI accelerators.

The KB analysts pointed to the aggressive expansion of production capacity for FC-BGA substrates at the Samsung Electronics affiliate, in line with surging demand from clients.

Revenue from the company's chip-packaging substrate business is projected to grow to 3.2 trillion won in 2026 and 4.1 trillion won in 2027, up from 2.3 trillion won last year, the analysts wrote. Meanwhile, it could widen its operating profit margin from 6% in 2025 to 14% this year and 18% next year, they said.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

May 26, 2026 05:27 ET (09:27 GMT)