"KOSPI Falls After Hitting 8,900: Growing Semiconductor Bubble Concerns Amid 'Dot-Com Bubble-Like Euphoria'"

Semiconductor Profit-Taking Drives Downturn

"Similar to the Period Before the Dot-Com Bubble Burst" vs.

"Boom Continues as Hyperscalers Ramp Up Investment"

The KOSPI fell more than 2% approaching the 9000 point mark, as shown on the status board at the Hana Bank dealing room in Jung-gu, Seoul on June 2. On that day, the KOSPI opened at 8,883.19, up 94.81 points (1.08%) from the previous close, while the KOSDAQ index started at 1,044.89, down 5.14 points (0.49%). June 2, 2026. Photo by Jo Yongjun

The KOSPI broke through the 8,900 mark during intraday trading, setting a new all-time high, but reversed course and declined as investors rushed to take profits. While positive outlooks on memory semiconductors remain dominant, there are also concerns about a potential bubble, leading to expectations of increased stock market volatility going forward.

KOSPI Hits 8,900 Intra-day for the First Time, Then Reverses Lower

On June 2, the KOSPI opened at 8,883.19, up 1.08% from the previous trading day, and hit a new record intraday high of 8,933.62 early in the session, only to quickly turn downward. The KOSDAQ started the day at 1,044.89, down 0.49%, and widened its losses further. As of this day, the KOSDAQ has fallen for five consecutive trading days.

Sectors that had been leading the KOSPI's rally, such as semiconductors and robotics, saw notable declines. As of 10:06 a.m., SK hynix was trading down 2.37% at 2,308,000 won, with LG Innotek (-19.5%), Samsung Electro-Mechanics (-10.3%), and SK Square (-1.19%) also posting sharp drops. However, market bellwether Samsung Electronics rose about 2% to 3,560,000 won, marking a new all-time high.

Analysts note that concerns about a bubble in soaring memory semiconductor stocks, raised on Wall Street, are putting pressure on share prices. This year, Samsung Electronics' share price has surged 195%, and SK hynix has soared by 265%. U.S. memory competitor Micron has also seen its share price more than triple this year.

Michael Burry, who predicted the 2008 financial crisis, warned that the current artificial intelligence (AI) frenzy closely resembles the reckless exuberance of the dot-com bubble. Burry recently posted on his social media, "The stock market no longer responds logically to economic indicators such as employment trends or consumer sentiment," adding, "Today's market behavior is reminiscent of the months just before the dot-com bubble burst in the early 2000s."

Billionaire hedge fund manager Paul Tudor Jones also described the current stock market boom as a "crazy time" in an interview with U.S. business channel CNBC, noting, "By every measure, whether it's the price-earnings ratio (PER) or operating profit, this period is very similar to October and November of 1999."

Even in the domestic securities industry, sell recommendations for memory semiconductor stocks are drawing attention. Minhee Lee, a researcher at BNK Securities, effectively issued a sell recommendation for SK hynix in a report released on May 12 titled "Risks Grow Amid Universal Optimism." Lee explained, "There is a possibility that big tech companies' AI infrastructure investments will slow in the second half of the year," citing that in the first quarter, U.S. cloud service providers' (CSPs) actual infrastructure investments reached only 98% of projections. Lee set a target price for SK hynix at 1,850,000 won and advised investors to reduce their holdings whenever the share price rises.

Jensen Huang, CEO of NVIDIA, is being interviewed by global media including Korean reporters at the "Korea Partner Night" dinner event held at a restaurant in Taipei, Taiwan on the 1st (local time). Photo by Yonhap News Agency

Positive Outlook Still Prevails for Memory Semiconductor Market

However, outlooks for the memory semiconductor market remain largely positive. Most forecasts suggest that explosive growth in market size will drive continued earnings improvement and share price increases for related stocks. According to market research firm Omdia and the Export-Import Bank of Korea, the memory semiconductor market is expected to grow by about 200% year-on-year this year to reach $677.5 billion (1,025 trillion won). Mihye Lee, a senior researcher at the Export-Import Bank of Korea, predicted, "The growth rate of the memory semiconductor market used in AI inference models will soar to at least three times previous forecasts."

The rapid expansion of the memory semiconductor market is being fueled by massive capital expenditures (CAPEX) from global big tech companies racing to dominate the AI market. According to Hyundai Motor Securities, combined capital expenditure projections for the five major hyperscalers—Amazon, Google, Microsoft, Meta, and Oracle—for next year have surged by more than $100 billion, rising from $753.6 billion (1,140 trillion won) to $864.3 billion (1,308 trillion won) following this month's earnings announcements. Jaeseung Kim, a researcher at Hyundai Motor Securities, explained, "The fact that CAPEX projections for 2027 were raised even further after first-quarter earnings releases has increased confidence in the sustainability of AI-related profits and is driving the strong performance of domestic semiconductor stocks."

Brokerages are steadily raising their target prices for Samsung Electronics and SK hynix. Hyungkeun Ryu, a researcher at Daishin Securities, released a report today setting new target prices for Samsung Electronics and SK hynix at 5,600,000 won and 3,400,000 won, respectively. Ryu emphasized, "Despite the significant rise in both companies' share prices, they remain among the most undervalued AI stocks," adding, "Stronger earnings growth potential and the transformative value of the memory semiconductor cycle should be further reflected in the stock prices."

The U.S. stock market is also hitting new all-time highs, led by semiconductor stocks. Overnight, the Dow Jones Industrial Average rose 0.09% from the previous session, while the S&P 500 and Nasdaq Composite Index climbed 0.26% and 0.42%, respectively, both setting new records. The Philadelphia Semiconductor Index also rose 1%, reaching a new historic high.

Nvidia surged 6.26%, lifting the U.S. stock market as CEO Jensen Huang announced the company's entry into the AI laptop market at the "GTC Taipei" event in Taiwan, prompting a positive reaction in the share price. Memory semiconductor company Micron also jumped 6.64%, continuing its streak of record highs. Remarks from U.S. President Donald Trump about mediating a ceasefire between Israel and Hezbollah and rapid progress in peace talks with Iran also contributed to improved investor sentiment.

Sangyoung Seo, a researcher at Mirae Asset Securities, analyzed, "Software stocks surged as CEO Huang highlighted the ongoing development of AI agents with leading enterprise software companies," adding, "It was viewed positively that AI is not a threat to the survival of software companies, but rather will serve as a tool to maximize productivity."

This content was produced with the assistance of AI translation services.