Samsung, SK Hynix Hit New Highs, South Korea Surges, Nikkei Closes Nearly Flat

TradingKey - On May 27, boosted by a surge in overnight U.S. chip stocks, both the Japanese and South Korean stock markets hit intraday record highs on Wednesday.

The Nikkei 225 Index opened higher but finished lower, surging more than 1,400 points to 66,428 points during the session before closing at 64,999.41 points, up a marginal 3.32 points or 0.01% from the previous trading day. The TOPIX closed at 3,918.01 points, down 0.52%, having also reached a new intraday high.

[Source: TradingView]

Semiconductor equipment stocks led the broader market gains, with film deposition equipment manufacturer Kokusai Electric surging 8.5%, Advantest closing up 4.05%, NAND flash memory maker Kioxia finishing 3.06% higher, and Tokyo Electron closing up 2.1%.

However, the gains were concentrated in heavyweight stocks, while the financial and real estate sectors lagged, dragging down the index's gains in the afternoon. Market dynamics suggest that capital is accelerating from traditional value sectors into the semiconductor space; this extreme divergence may increase the risk of a short-term correction.

South Korea's KOSPI index continued to rally after opening 2.4% higher, surging as much as 5% intraday to touch a record high of 8,457.09 points. KOSPI 200 futures triggered a circuit breaker after opening up 5%, resulting in a 5-minute suspension of programmed trading. The KOSPI index closed up 2.25% at 8,228.7 points.

[Source: TradingView]

SK Hynix and Samsung Electronics were the primary drivers of the market rally. SK Hynix once soared approximately 13%, with its market capitalization surpassing $1 trillion for the first time, making it the third semiconductor company in Asia to reach a trillion-dollar valuation.

Samsung Electronics jumped over 8% during the session to reach 323,000 won, a new high since its 2018 stock split, before narrowing its gains to close up 2.68%. Additionally, Samsung Electronics passed a wage increase agreement with a 73.7% approval rate, completely resolving the strike risk caused by previous failed negotiations and clearing short-term hurdles for the stock's upside.

The Philadelphia Semiconductor Index jumped 5.53% overnight, while Micron Technology (MU) soared 19.3% to a market cap of over $1 trillion, providing a direct catalyst for Japanese and South Korean stocks. The supply shortage of HBM (High Bandwidth Memory) triggered by AI chip demand is driving a valuation rerating of the memory chip industry.

Both SK Hynix and Micron have fully sold out their capacity through 2026, leaving the industry in a state of tight supply-demand balance. Notably, the tight balance in HBM capacity means that any supply disruption could trigger a sharp spike in prices.

Falling oil prices provided additional support for the market rally. Driven by expectations of easing tensions between the U.S. and Iran, international oil prices moved lower overnight, benefiting Japan and South Korea, two economies that are highly dependent on energy imports.