Kospi tops 4,500, but semiconductor mirage warrants caution

Home > Opinion > Editorials

Kospi tops 4,500, but semiconductor mirage warrants caution

Published: 07 Jan. 2026, 00:00

Audio report: written by reporters, read by AI

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing on Jan. 6. [YONHAP]

The Kospi has climbed above the 4,500 mark. On Tuesday, the benchmark index closed at 4,525.48, up 67.96 points, or 1.52 percent, from the previous session. A rally that has continued into the opening days of the year has drawn liquidity back into equities, bringing the Lee Jae Myung administration’s pledge of a “Kospi 5,000 era” into clearer view. A buoyant market can bolster confidence among households and firms and add momentum to the economy. It can also ease exchange rate pressures by pulling investment funds back home. Even so, it is difficult to read the surge as evidence of a broad economic recovery. The advance is being powered largely by semiconductors, raising concerns about a so-called semiconductor mirage.

Concentration in chipmakers is intensifying. In just three trading sessions this year, Samsung Electronics has surged 15.8 percent and SK hynix 11.5 percent, together far outpacing the index’s 7.3 percent gain. The two stocks now account for more than 35 percent of the Kospi’s total market capitalization, an all-time high. This means the index can rise even when more stocks fall than rise. On Monday, when the Kospi jumped 147 points, more than half of listed shares actually declined.

This lopsided rally reflects underlying economic realities. Korea’s exports surpassed $700 billion last year, setting a new record. The feat was driven by a boom in memory demand linked to AI, which lifted semiconductor exports by 22.2 percent year on year. Beyond chips, however, the picture was far less encouraging. Petrochemicals, secondary batteries and steel saw exports fall by 11.4 percent, 11.9 percent and 9.0 percent, respectively. Nine of the country’s 15 major export categories posted negative growth.

Strong semiconductor performance is welcome. The risk is overreliance. Excessive concentration can leave both the economy and financial markets structurally vulnerable, while widening gaps between export industries and between exports and domestic demand. Bank of Korea Gov. Rhee Chang-yong recently said that excluding the information technology sector, growth would be limited to about 1.4 percent, well below the central bank’s overall forecast of 1.8 percent. Recovery gaps across sectors, he warned, could widen the disconnect between headline indicators and lived economic conditions, making a K-shaped recovery neither sustainable nor complete.

A stock market rally detached from the real economy also risks deepening inequality by widening the divide between asset holders and wage earners. Rather than simply cheering the index’s rise, policymakers should focus on easing excessive concentration and ensuring growth gains spread more evenly across sectors. That will require loosening regulations to foster new industries and pushing ahead with structural reforms so the benefits of growth extend beyond a narrow group of winners.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.