KOSPI-Nasdaq Correlation Hits 5-Year High as AI Bet Worryingly Binds Markets

South Korea’s Kospi index and the Nasdaq 100 are moving in near lockstep. Their 60-day correlation climbed to about 0.50, the highest level since 2021, according to data from Rayliant Global Advisors.

The tightening link traces back to artificial intelligence (AI) spending. It now ties Samsung Electronics and SK Hynix to the same hyperscaler capital expenditure driving U.S. tech earnings.

Chipmakers Anchor the Kospi

Samsung and SK Hynix together account for more than half of the Kospi index. These important companies in South Korea thus also sway the index, linking AI infrastructure directly to the way in which the market moves.

Data-center demand made up roughly 40% of global DRAM (dynamic random-access memory) demand last year. That figure now exceeds half, and many expects it to keep rising.

That volatility played out again this week. SK Hynix’s recent selloff knocked the stock down 13% as AI capital expenditure doubts spread through the chip sector.

A Two-Way Signal With Rising Risk

Samsung and SK Hynix trade hours before Wall Street opens. That gives them an early-proxy role for how investors may react to AI news.

“The fortunes of U.S. tech stocks and Korean tech stocks are increasingly being driven by a common underlying factor, which is sentiment toward the AI hardware trade.”

— Wool, head of research at Rayliant Global Advisors

The dynamic cuts both ways. On July 13, Kospi’s chip-driven crash sent the index down more than 8% as SK Hynix plunged 15%. The Nasdaq 100 followed with a 1.88% drop. Micron fell 4%, SanDisk fell 12%, and Intel fell 6%.

Some have warned that a slowdown in hyperscaler capex would hit Korea harder than most markets. Half the Kospi now rests on one cyclical theme. Korean memory stocks also carry more volatility than U.S. peers, and leveraged ETF flows amplify the swings.

Samsung typically releases earnings guidance two weeks ahead of major U.S. semiconductor results. That timing could offer the next read on how closely the two markets trade together.

China’s Changxin Technology Group (CXMT), a rising domestic memory chipmaker, surged 466% on its Shanghai listing. That surge made it China’s most valuable listed company.