Global Chip Rally Puts SK Hynix, Micron in $1 Trillion Market Cap Club

SK Hynix's market capitalization surpassed $1 trillion on May 27, joining Samsung Electronics earlier this month and Micron Technology overnight as the latest beneficiaries of expectations that the global memory-chip boom will continue. Investor demand was also strong for newly launched leveraged exchange-traded funds tied to Samsung and SK Hynix, with nearly 5 trillion won ($3.63 billion) flowing in on their first trading day.

The Kospi closed up 2.25% at 8,228.70 on May 27, one day after breaking above the 8,000 level and quickly advancing past 8,200. The benchmark index also topped 8,400 during intraday trading.

Semiconductor heavyweights that have driven South Korea's stock rally posted another day of sharp gains. SK Hynix rose 9.31% to 2.243 million won at the close. Its market capitalization climbed to 1,598.5914 trillion won, or about $1.065 trillion, making it the second South Korean company after Samsung Electronics on May 6 to enter the $1 trillion club.

SK Hynix ranked 12th globally by market capitalization, ahead of Berkshire Hathaway at $1.043 trillion. It also moved back ahead of Micron, which crossed the $1 trillion threshold overnight at $1.01 trillion. Samsung Electronics gained 2.68%, finishing above 300,000 won for the first time on a regular-session closing basis.

A rebound in US semiconductor sentiment on May 26 spilled into South Korea's market. UBS tripled its target price on Micron and argued the sector should be valued on more normal metrics rather than through the lens of the traditional boom-and-bust chip cycle. That call helped lift investor appetite. The 12-month forward price-to-earnings ratio UBS applied to Micron was 15 times, well above the 6 to 7 times for Samsung Electronics and SK Hynix.

Mizuho wrote that memory remains the backbone of AI and that demand will outstrip supply through 2026 and 2027. It added that there is still no clear view on when that demand-driven imbalance will end, reinforcing expectations for a longer cycle.

Investor money also poured into single-stock ETFs tracking Samsung Electronics and SK Hynix, which made their domestic debut on May 27. The combined market capitalization of the 16 single-stock ETFs totaled 4.995 trillion won ($3.63 billion).

With SK Hynix's market capitalization now above $1 trillion, South Korea became the second country after the US to have more than one company in the trillion-dollar club. Only four non-US companies worldwide are worth more than $1 trillion, and half of them are South Korean.

CompaniesMarketCap, which tracks the market value of global companies, counted 14 members in the $1 trillion club. Ten are US companies, including Nvidia at $5.204 trillion, Alphabet at $4.662 trillion, Apple at $4.528 trillion, Microsoft at $3.09 trillion and Amazon at $2.853 trillion.

South Korea ranks second by number of trillion-dollar companies. Samsung Electronics is 11th at $1.347 trillion and SK Hynix is 12th at $1.066 trillion. SK Hynix crossed the threshold after its Kospi market value jumped 9.31% on May 27. Outside the US, the only other companies in the club are Taiwan's TSMC at $2.138 trillion and Saudi Aramco at $1.798 trillion.

South Korea is the only country outside the US with two companies in the $1 trillion club, reflecting expectations that the global semiconductor cycle will continue to drive Samsung Electronics and SK Hynix shares higher. After Micron joined the club overnight in the US on optimism about the chip cycle, Samsung Electronics and SK Hynix surged the next day.

South Korean market experts also see the semiconductor cycle extending. Han Ji-young, an analyst at Kiwoom Securities, said earnings momentum in AI value-chain stocks is holding up and strengthening semiconductors' dominance as market leaders. Ahn Ki-tae, an analyst at NH Investment & Securities, said AI-related investment by Alphabet, Amazon, Meta, Microsoft and Oracle will continue through 2028.

South Korean retail investors also bet the rally led by Samsung Electronics and SK Hynix would continue. On May 27, they sold the common shares and bought leveraged single-stock ETFs instead, a sign they saw leveraged products as the better way to boost returns if chip earnings remain strong.

According to the Korea Exchange, retail investors were net sellers of 1.0811 trillion won ($785 million) of SK Hynix shares on May 27, the largest net sale among all stocks. They also sold a net 394.6 billion won ($286 million) of Samsung Electronics preferred shares and 359 billion won ($261 million) of Samsung Electronics common shares. The money shifted into leveraged ETFs that track those stocks at twice the daily return. SK Hynix leveraged ETFs, the top two net-bought products, drew 1.3581 trillion won ($986 million). Samsung Electronics leveraged ETFs, ranked sixth and seventh in net buying, attracted 593.9 billion won ($431 million).

As investors rotated out of cash equities and into ETFs, the total market capitalization of listed ETFs surpassed 500 trillion won ($363 billion) on May 27. That covers all 1,132 ETFs listed on the market and marks a 100 trillion won increase in just 42 days after the total first crossed 400 trillion won ($290 billion) on April 15. Net assets, which reflect the actual value of ETF holdings, are also estimated to have topped 500 trillion won for the first time.

Kang Jin-gyu, Hankyung.com reporter josep@hankyung.com