SEOUL, February 19 (AJP) — South Korea’s benchmark KOSPI has emerged as the world’s best-performing major equity index so far in 2026, extending a record-breaking rally and decisively shaking off the long-standing “Korea discount.”
The index has more than doubled since the end of 2024, rising nearly 34 percent this year alone after a 75.6 percent surge in 2025. No other major global benchmark has matched its year-to-date performance, reflecting a structural re-rating of Korean equities rather than a temporary rebound.
Market analysts say the rally is being driven by Korea’s growing role at the core of the global artificial intelligence supply chain — from memory chips powering hyperscale data centers to power and grid equipment needed to support soaring electricity demand.
With the index advancing steadily toward the symbolic 6,000 level, most major winners are concentrated in sectors benefiting from the AI investment cycle.
Power equipment leads the rally
Among the standout performers is HD Hyundai Electric, whose shares have surged about 5,300 percent over the past five years.
The rally has been fueled by a global supercycle in power infrastructure, driven by massive investment in transmission networks and substations to support data centers and electrification.
Last year, the company posted revenue of 4.08 trillion won, up 22.8 percent from a year earlier, while operating profit jumped 48.8 percent to 995.3 billion won.
Yoo Jae-sun, an analyst at Hana Securities, said the company’s product mix is strengthening earnings. “High-margin power distribution products centered on ultra-high-voltage equipment are being added to the portfolio, which should make a meaningful contribution to profits,” Yoo said.
Overseas markets have been the main growth engine. North American revenue rose 29.7 percent last year to account for 47 percent of total sales, while European revenue climbed 38.3 percent to exceed 10 percent.
Shares have gained more than 13 percent over the past month and were trading up 2 percent at 968,000 won on Thursday afternoon.
Semiconductors ride the AI supercycle
Chipmakers are also benefiting from sustained global demand for AI hardware.
The Philadelphia Semiconductor Index remains near record territory, reinforcing confidence in the sector.
Son Ik-jun of Heungkuk Securities expects the upcycle to persist.
“The supply shortage of DRAM and NAND is likely to continue through 2027,” Son said.
“Combined operating profit at major memory makers could reach 36.2 trillion won in 2026 and 46.9 trillion won in 2027.”
Against this backdrop, Samsung Electronics has climbed sharply over the past year, rising from around 50,000 won to above 170,000 won as AI-driven chip demand accelerates.
The rebound has been supported by rising DRAM and NAND prices since late 2024, improving margins and a turnaround in quarterly earnings. The stock was up 4.25 percent at 188,900 won on Thursday.
Nomura Securities recently raised its target price for Samsung to 290,000 won, citing signs that the company is regaining leadership in the memory market.
SK hynix has also advanced, supported by strong demand for high-bandwidth memory used in Nvidia’s AI accelerators. Shares rose 1.99 percent to 897,500 won.
Over five years, SK hynix has gained 561.6 percent, while Samsung is up 115.2 percent, reflecting the memory supercycle and the rapid expansion of AI-related workloads.
Long-term winners broaden
Five-year performance data point to a broader multi-year upcycle across Korean industries.
As of Feb. 13, 2026, Isu Petasys led long-term gainers with a 3,379 percent rise, followed by Hyosung Heavy Industries (2,645 percent) and Hanwha Aerospace (2,464 percent).
HD Hyundai Marine Engine and Doosan Enerbility also delivered strong gains of 2,308 percent and 696 percent, respectively.
Isu Petasys has benefited from rising demand for high-layer printed circuit boards used in AI servers, high-performance computing systems and advanced networking equipment. Brokerages including Meritz and SK Securities have raised target prices, citing its growing role in advanced packaging and TPU-related supply chains.
Strong performance has not been limited to technology.
Industrial and defense-related names have also outperformed amid shifting geopolitical and security conditions.
Hanwha Ocean has risen 379 percent over five years, supported by rising global defense spending and stronger shipbuilding demand.
Shipbuilding, aerospace and heavy machinery firms have benefited from expanding export orders and government-backed investment programs linked to security and energy infrastructure.
Analysts say the KOSPI’s strong showing reflects more than cyclical recovery.
After years of underperformance due to governance concerns, geopolitical risk and weak valuations, Korea’s equity market is undergoing a structural re-rating as global investors reassess its position in the AI-driven economy.
Korean companies now occupy critical positions in memory chips, advanced components, power equipment and industrial systems — industries that form the backbone of the AI ecosystem.
As global investment in artificial intelligence infrastructure continues to accelerate, Korea’s equity market is adjusting in parallel.
Market participants say the rally increasingly reflects long-term competitiveness rather than short-term speculation, positioning the KOSPI as a leading global benchmark in the AI era.
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