KOSPI Reclaims 7,000 as Nuclear Power Stocks Surge on U.S. Investment Hopes

Government in Talks to Build 8 Large-Scale Nuclear Power Plants in the U.S.

Beneficiaries Expected to Include Doosan Enerbility, Hyundai Engineering & Construction, and KEPCO E&C

Optimism Surrounding OpenAI's "Astra" Persists, Boosting Semic

On the 7th, the status board in the dealing room of Hana Bank in Jung-gu, Seoul, displays the KOSPI, KOSDAQ, and the won/dollar exchange rate as the KOSPI closed with a surge of over 4.6%. Photo by Yonhap News

Driven by news that the Korean government is pursuing the construction of large-scale nuclear power plants in the United States as an investment project, related stocks surged sharply, helping the KOSPI reclaim the 7,000-point level. Additionally, expectations that OpenAI's latest artificial intelligence (AI) model, 'GPT-6 Astra', will boost demand for memory semiconductors continued to fuel the strong performance of semiconductor stocks.

Discussions Underway to Build Eight Large Nuclear Power Plants in the U.S.

On September 8, the KOSPI opened at 7,045.79, up 0.72% from the previous session, and expanded its gains, trading at 7,089.21 as of 10:00 a.m., up 1.34%. This is the first time the KOSPI has exceeded 7,000 points during the session since August 18. At the same time, the KOSDAQ was trading at 822.14, down 0.01%.

While the New York Stock Exchange remained closed overnight for Labor Day, the Korean stock market saw power plant-related stocks drive the rally. Following reports the previous day that Korea and the United States are negotiating the construction of up to eight large-scale nuclear power plants in the U.S., related companies saw their share prices soar.

According to the government and political circles, the Ministry of Trade, Industry and Energy reported these details at a closed-door meeting with the National Assembly the previous day. The U.S. side has reportedly proposed investing 120 billion dollars in the construction of eight nuclear power plants out of the total 200 billion dollars in investments to the U.S., excluding 150 billion dollars earmarked for the shipbuilding sector.

Separately, the Korean government is moving forward with its first U.S. investment: building a gas-fired combined cycle power plant in Encinal, Texas. This investment aims to meet the electricity demand for the advanced semiconductor factories and AI data centers to be built in Texas.

As reports of investments in the U.S. spread, shares of power plant-related companies such as Doosan Enerbility (up 4.32%), KEPCO E&C (up 14.31%), Korea Electric Power Corporation (up 3.05%), Hyundai Engineering & Construction (up 4.49%), and Seojeon Electric Machinery (up 17.61%) continued to rally for the second day in a row. The securities industry points to Doosan Enerbility as the biggest beneficiary of the investment in the U.S. Cho Jaewon, an analyst at Kiwoom Securities, explained, "Doosan Enerbility supplies equipment for both the Korean-model nuclear reactor and Westinghouse's AP1000 reactor model in the U.S., making its benefit from U.S. investments intuitive," adding, "It is cited as the top pick in the sector."

Cho also noted, "As nuclear power cooperation between Korea and the United States becomes increasingly tangible, investment sentiment in the domestic nuclear power sector is expected to improve." However, he added, "Since specific details have not yet been finalized, it is difficult at this stage to precisely identify the beneficiary companies, the extent of the benefits, or the pace of future investments."

Seungjun Kim, an analyst at Hana Securities, said, "Among listed Korean construction firms capable of carrying out EPC (Engineering, Procurement, and Construction) of combined cycle power plants in the U.S. are Samsung C&T, Hyundai Engineering & Construction, DL E&C, and Doosan Enerbility," adding, "The main beneficiaries may differ depending on which companies participate in the EPC."

Continued Optimism for OpenAI's Astra, Semiconductor Stocks Remain Strong

Shares of Samsung Electronics and SK hynix are also climbing in anticipation that OpenAI's 'Astra' will expand demand for semiconductors. As of 10:03 a.m. on September 8, SK hynix was trading at 1,851,000 won, up 3.81%, while Samsung Electronics was up 1.30% at 273,500 won. Related stocks such as SK Square (up 3.11%) and Samsung C&T (up 1.04%) are also rising.

Forecasts for Samsung Electronics and SK hynix are being revised upward. According to financial information provider FnGuide, as of September 4, Samsung Electronics' third-quarter operating profit estimate was tallied at 114.1888 trillion won, up 12% from the forecast three months earlier (101.9052 trillion won). SK hynix's third-quarter operating profit estimate was also raised by 4% to 78.8035 trillion won from 75.7249 trillion won three months ago.

Mirae Asset Securities raised its target price for Samsung Electronics from 370,000 won to 400,000 won, citing continued profit momentum, and revised SK hynix's target price upward from 2,800,000 won to 3,100,000 won. Mirae Asset Securities analyst Kim Younggeon emphasized, "Improvements in the memory market centered on high-bandwidth memory (HBM) and strengthened technological competitiveness will drive up both companies' share prices."

Some predict that expected earnings improvements through next year, together with OpenAI's new AI model 'Astra,' will further boost the share prices of Samsung Electronics and SK hynix. Choi Boyoung, a research fellow at Kyobo Securities, said, "If OpenAI expands the scope of tasks assigned to AI through Astra and creates new usage, server and memory demand could also increase," adding, "Improvements in productivity and profits realized by companies adopting AI will increase demand for the service, and AI providers will reinvest the profits into servers and memory, creating a virtuous cycle that is a prerequisite for a prolonged rally."

Injun Son, an analyst at Eugene Investment & Securities, also noted, "OpenAI's 'Astra' is ushering in an era in which AIs have long-term work execution capabilities, making it possible to assign complex tasks from start to finish," adding, "This will further raise long-term growth expectations for HBM and DRAM demand."

However, there are concerns about earnings pressures as the won/dollar exchange rate continues to decline. A falling won/dollar exchange rate is a short-term negative factor for exporters such as semiconductor and automobile companies. Seungyeon Seo, an analyst at DB Financial Investment, cautioned, "Third-quarter results for Samsung Electronics and SK hynix may slightly undershoot market expectations due to the unfavorable exchange rate situation."

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