※ This article is based on a video released on June 26, 2026.

The South Korean stock market is riding a dizzying "Roller-KOSPI." On June 23, the KOSPI experienced one of its sharpest drops in history. However, it rebounded immediately, and in the early morning of June 25 (KST), U.S. memory chipmaker Micron Technology delivered a massive earnings surprise—as if to say, "You couldn't have imagined these numbers"—along with an even more positive outlook.

This instantly inflated expectations for Samsung Electronics and SK Hynix, the industry giants positioned above Micron, sending their stock prices soaring. It is a market environment that tests even the boldest investors, simultaneously instilling a fear of missing out (FOMO). How should investors navigate this? In the fourth week of June, is it still advantageous to buy Samsung Electronics and SK Hynix? And how should we evaluate the overall South Korean stock market, which is practically being weighed down by these two tech giants?

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Micron has long been nicknamed the "bellwether of the memory market." Among the world's top three memory semiconductor companies—Samsung Electronics, SK Hynix, and Micron—third-place Micron is always the first to report its quarterly earnings. Furthermore, the market shares of these three companies in the oligopolistic memory market are relatively fixed. Therefore, looking at the earnings and outlook released by Micron on Thursday, one can immediately outline what the earnings and outlook for Samsung Electronics and SK Hynix, which are not due until late July, will look like.

And Micron hit a home run. In fact, right before the earnings announcement, the market's mood was skeptical, as if folding its arms and squinting, thinking, "Even a triple won't win this game now." However, by delivering stellar results akin to a grand slam out of the park, Micron once again drew the response: "Indeed, memory semiconductors are the only place to invest right now." While Micron's earnings report was filled with spectacular numbers, the core takeaway was this: "Will AI investment continue at this rate? The answer has arrived."


"Sold Out Even in 2027"... Chipmakers Prove to Be the Ultimate Power Players
Memory semiconductor companies have taken center stage in the market because prices have surged. Not only has the price of high-bandwidth memory (HBM)—the already expensive new AI memory—skyrocketed, but prices for conventional commodity memory like DRAM and NAND flash have also jumped around tenfold in just a year. Selling nearly the identical product for ten times the price compared to a year ago is a market phenomenon that defies conventional logic.

How long will these soaring valuations last? Micron's answer during this earnings call was firm: memory semiconductors will remain in short supply, just like now, until 2027. While supply is expected to gradually start catching up with demand starting in 2028, the process will be slow. In short, the value of memory semiconductors will remain high for at least the next two years.

To illustrate just how much leverage these memory chipmakers currently hold: Micron's gross margin (revenue minus the cost of goods sold) was around 75% last quarter, but rose to 85% in just one quarter. A gross margin of 75% is already an unbelievable figure in manufacturing. For it to jump another 10 percentage points in a single quarter means the world is willing to pay that much more for Micron's chips. Rather than declining, the gross margin is projected to rise slightly further to 86% next quarter. This significantly exceeded market expectations, fueling anticipation: "If this is the case for Micron, just how much cash are Samsung Electronics and SK Hynix raking in?"

Furthermore, because conventional memory semiconductors are highly cyclical products, it was standard practice to sign short-term, three-month contracts. This was because no one knew how prices would change or what the buyers' needs would be in three months. Depending on the economic cycle, the customers generally held the upper hand in this industry.

But with the advent of AI, customers are now begging for supply, asking to sign five-year contracts to secure even a single extra chip more reliably. This is a new phenomenon emerging in the memory semiconductor market. One of the questions investors were most curious about this time was: "Are there really that many clients wanting to sign such ultra-long-term contracts? If so, shouldn't we view memory chipmakers through a different lens than in the past?"

Micron's answer was that they have already signed 16 long-term contracts spanning three to five years. Among them, four are major clients. The so-called hyperscalers and Big Tech firms developing AI—those racing to build data centers for AI development—have signed ultra-long-term five-year contracts, while automotive companies have signed three-year deals. Even automakers, fearing they won't be able to manufacture vehicles due to a lack of chips, are requesting contracts as long as three years. Micron expects that these long-term contracts alone will eventually account for 40% of its revenue.

If this is the case, memory semiconductors are no longer the same business as in the past. If third-place Micron is performing like this, what about Samsung Electronics and SK Hynix? This sentiment has grown even stronger.


Beware of Stock Market Volatility Immediately Following Stellar Earnings!
In fact, Micron also reported strong earnings last March. However, its stock price actually fell by 28% over the two weeks following the announcement. Even with that drop, the price was still more than double what it was a year prior. Because even third-place Micron's stock price kept surging at an unprecedented pace, market volatility was high.

However, as the earnings of Samsung Electronics and SK Hynix were subsequently released, it was repeatedly confirmed that memory semiconductors are indeed the most valuable assets in the AI race, leading to the surge in chipmakers' stock prices that we witnessed in the second quarter. The general expectation now is that the stock prices of the three memory giants will follow a similar pattern in the third quarter. While stock price volatility will persist, these companies will ultimately prove their worth through their earnings.

Following Micron's earnings release, institutions began raising their target stock prices for Samsung Electronics and SK Hynix, whose earnings announcements are still a month away. KB Securities, which had predicted Samsung Electronics' current stock price by raising its target to 360,000 won immediately after Samsung's earnings release last April, has further raised its target price to 550,000 won.
Mirae Asset even raised its target price for SK Hynix to 4.2 million won per share. This outlook takes into account SK Hynix's plan to list on the New York stock market on July 10, issuing American Depositary Receipts (ADRs) worth up to 45 trillion won. Since SK Hynix announced it would enter the New York market by issuing new shares rather than using existing ones, some investors are questioning whether this is good news for those who have already invested in SK Hynix on the South Korean stock market.

However, the company decided to limit the size of the newly issued shares to within 2.5% of its total outstanding shares. The general consensus in the semiconductor industry is that rather than the dilution of existing shares, listing on the New York stock market and potentially being included in major indices like the Philadelphia Semiconductor Index (SOX) is highly likely to help SK Hynix's stock price trend upward in the long run.


Sprinting While Taking on Debt... "AI Investment Comparable to the Railway Revolution"
Of course, it is not all rosy outlooks. In particular, questions inevitably persist: "How long can AI investment continue at this speed and scale?" Currently, high-bandwidth memory (HBM) for AI is not being purchased by average consumers buying PCs or smartphones. The customer base is highly specific. About 11 U.S. Big Tech companies entering the infinite AI race are identified as the primary buyers, and all of them are in a do-or-die mode, believing that falling behind in AI means the end of their business.

Recently, their investments in AI have begun to approach their net profits. While these tech giants could previously fund investments with their cash reserves, they must now take on debt. No matter how massive these Big Tech companies are, if AI revenues do not sufficiently catch up, how long can they sustain such an enormous scale of investment?

Furthermore, if, as expected, central banks around the world, including the U.S., start raising interest rates after the second half of this year, or if market interest rates and government bond yields fail to drop due to high levels of national debt in many countries, will these companies still be able to take on debt at burdensome interest rates to maintain their massive capital expenditures? Such concerns continue to arise.

Additionally, once the large-scale facility investments currently being pursued by Samsung Electronics, SK Hynix, and Micron are completed, will they be able to maintain the insane operating profit margins they are currently enjoying due to high memory prices? What if the market enters a state of overcompetition where supply outstrips demand, causing product prices to plunge—just as it did when it was a typical cyclical industry in the past? This is precisely the view of Goldman Sachs, which currently maintains the most conservative stance on the memory semiconductor industry.

However, looking at the situation as a whole, it is difficult to consider the current stock prices of Samsung Electronics and SK Hynix expensive, at least until the end of this year. Compared to Micron, Samsung Electronics and SK Hynix are still relatively cheap when looking at their projected earnings over the next year. Meritz Securities analyzed that the current AI investment boom should not be compared to the IT investments of the 1990s and onward. Instead, it should be compared to the aggressive investments that lasted for 20 years when electricity became widespread globally a century ago, or the 50-year era of pouring money into railways in the 19th century.

Even if Big Tech companies begin to feel the burden of AI investments, it is difficult for any of them to be the first to pull out of the current race. Considering that many people are already paying for AI services and companies are adopting AI at a rapid pace, the trend of monetizing AI is clearly taking root. While no one can predict the future with absolute certainty, there is currently no sign of anyone slowing down in this sprint of AI competition.


The KOSPI Swallowed by Samsung and Hynix
Instead, many experts argue that it is time to focus more on the side effects of Samsung Electronics and SK Hynix becoming too dominant within the South Korean stock market. Currently, the combined market capitalization of Samsung Electronics and SK Hynix hovers around 70% of the total KOSPI market cap. This cannot be considered a normal proportion.

On top of that, an opportunity that could have prompted foreign institutions to consider increasing their investment weight in the overall South Korean stock market fell through. South Korea's inclusion on the watch list for MSCI's developed market status was rejected. The opportunity that could have put the brakes on foreign investors quickly converting their massive profits from Samsung and Hynix into U.S. dollars will ultimately not materialize this year.

With the introduction of single-stock 2x leverage products for Samsung and Hynix, it feels as though two sharks have entered a small fish tank at a local raw fish restaurant. This anomalous supply-and-demand situation continues in our stock market, as if motors have been attached to the sharks' fins, causing them to harm other fish. The general consensus is that the historic crash in the South Korean stock market on June 23 could not be blamed on external factors; rather, it was caused by extreme market concentration, compounded by inflated supply and demand from leverage products.
Why were single-stock 2x leverage products introduced in the first place? Although they were reportedly adopted in hopes of helping to lower the foreign exchange rate, they have shown little benefit to the exchange rate so far. Leverage ETFs are largely acting as a force that will repeatedly trigger historic volatility in the stock prices of Samsung Electronics and SK Hynix in the future, while simultaneously draining liquidity from other companies.