The KOSPI’s two growth engines and what the correction means for investors

Beansprout Pro in brief

• The KOSPI rose 75.6% in 2025 and continued climbing in 2026, before falling about 30% from its June peak. Even after the correction, it remains more than 50% higher for the year.
• The rally has been driven by two distinct forces, South Korea’s Value Up reforms, which aim to narrow the Korea discount, and a sharp recovery in memory chip prices and earnings.
• The Value Up programme is encouraging stronger governance, higher shareholder returns and share cancellations. These reforms could support higher valuations over time, although progress will differ across companies.
• The faster earnings boost has come from the memory semiconductor cycle. Tight supply and strong AI related demand have driven significant increases in DRAM and high bandwidth memory prices.
• Samsung Electronics and SK Hynix now make up about half of the KOSPI. This means investors are increasingly buying exposure to the global memory chip cycle, rather than a broad representation of the Korean economy.
• In this update, we separate the structural Value Up thesis from the cyclical memory upturn, examine whether the correction presents an opportunity, and explain where broad KOSPI exposure may fit within a portfolio.