Japan, South Korea Stocks Open Higher Tuesday; AI Drives Korean Shares Near 8,000

TradingKey - On May 12, driven by the AI wave, the rally in Asia-Pacific tech stocks remained fervent, as Japanese and South Korean markets extended their gains and opened higher across the board.

The Nikkei 225 index opened 0.2% higher, later expanding its gains to 0.66%, with heavyweight SoftBank's share price rising over 3%; South Korea's KOSPI index opened 1.8% higher and surged rapidly, at one point touching 7,999 points, just one step away from the 8,000-point mark, as tech leaders SK Hynix rose over 4% and Samsung Electronics gained nearly 2%.

Behind the recent strong performance of the South Korean stock market is the robust support of the semiconductor industry. In the first quarter of 2026, South Korea's export volume reached $219.9 billion, a significant year-on-year increase of 37.8%. The semiconductor industry performed particularly well, with exports surging 139% year-on-year to $78.5 billion, becoming the core driver of overall exports.

Goldman Sachs ( GS) stated that, benefiting from the surge in demand for memory chips brought about by the explosion of the AI industry, South Korea's AI-related exports as a percentage of GDP are expected to climb to 30% this year, a threefold increase from the sub-10% levels seen over the past decade.

As the core heavyweight sector of the South Korean stock market, memory chip stocks account for as much as 50% of the KOSPI index and have contributed approximately 70% of its gains this year. So far this year, SK Hynix's stock price has accumulated a gain of over 180%, while Samsung's stock price has risen by more than 120%, making them a focal point of global capital markets.

As the South Korean stock market continues to rise, its total market capitalization has overtaken that of the Taiwan stock market. According to data from the Korea Exchange and the Taiwan Stock Exchange, as of the 11th, the market value of the South Korean stock market had reached 7,084 trillion won, or approximately $4.81 trillion, while the Taiwan stock market's value was about $4.34 trillion, meaning the South Korean market has overtaken it by $470 billion.

International investment banks are also optimistic about the prospects of the South Korean stock market, and JPMorgan ( JPM) recently raised its target for the Korea Composite Stock Price Index (KOSPI) for the second time in less than a month. The bank raised its base target from 7,000 to 9,000 points and its optimistic target from 8,500 to 10,000 points, citing an improving semiconductor industry cycle, corporate governance reforms, and growth in the industrial sector.

However, geopolitical risks may still disturb the market. On May 11, U.S. President Trump told the media at the White House that Iran's response to the U.S. proposal was "stupid," and that the current ceasefire agreement with Iran is in a "precarious" state, further claiming he would achieve a "total victory" over Iran. This statement has reignited tensions in the Middle East, potentially bringing uncertainty to global capital markets.