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AI-driven chip demand is powering South Korea stocks and lifting ETF performance sharply this year.
Semiconductor giants Samsung Electronics and SK Hynix remain key drivers of Korea's market rally.
Positive alpha signals strong outperformance potential for South Korea ETFs amid the global chip crunch.
Asian stocks have been great shape this year, with iShares Asia 50 ETF (AIA - Free Report) gaining 15.2% year to date compared with a 0.6% uptick noticed in State Street SPDR S&P 500 ETF Trust (SPY - Free Report) . Over the past five days, AIA gained about 3.9% while SPY rose only 0.5% (as of Feb. 25, 2026). Among the Asian region, the South Korean market has grabbed specific attention.
iShares MSCI South Korea ETF (EWY - Free Report) has added 41.4% so far this year. The market has been hitting fresh highs lately. South Korea’s Kospi index even crossed the 6,000-mark for the first time ever. The rise in the South Korean market is attributed to the spike in Samsung Electronics and SK Hynix shares, the largest and second-largest market capitalization stocks, thanks to the AI-driven memory semiconductor supercycle, per Maeil Business Newspaper. After all, semiconductors account for a significant share of the country’s market performance.
Inside the Rally
The EWY ETF has surged dramatically over the past one year with about 151% gains. The KOSPI index logged its best growth rate in the 2000s last year thanks to AI-driven semiconductor demand and government reforms. In 2026, the rally has continued strongly, with the index hitting 6,000 amid sustained earnings growth and policy support.
Note that in late Jan. 2026, Samsung reported record quarterly profit due to AI-driven memory demand. Results beat estimates and top Samsung’s own guidance for the quarter, as quoted on CNBC. Meanwhile, SK Hynix too doubled profit in 2025 as memory shortages led to earnings beat, per CNBC.
SK Hynix Inc. shares have gained 12.5% over the past five days, while those are up 50.4% so far this year. Samsung Electronics has added 8.2% over the past week while the stock has surged 58.4% in the year-to-date frame.
Should You Buy South Korea ETFs?
According to Goldman Sachs, as quoted on CNBC, South Korea stands out as Asia-Pacific’s top market, having almost doubled in 2025. The investment bank’s analysts argue the momentum is far from over, projecting Korean equities to surge 120% in 2026.
Per an article from the Korea Times, growth estimates remain broadly aligned, with the IMF forecasting 1.9% real GDP growth, the Bank of Korea 1.8%, and the OECD 2.1%. Moody’s forecasts 1.8% growth for Korea in 2026, thanks to expanding semiconductor exports and stronger investment as the global AI upcycle persists.
Since there is a global chip crunch and strong demand for semiconductors -- driven by artificial intelligence, data centers and advanced electronics -- continues to outpace supply, tech-heavy as well as export-heavy South Korea ETFs stand to gain ahead.
Additionally, Moody’s Investors Service retained South Korea’s “Aa2” credit rating with a stable outlook, as per the article.
ETFs in Focus
Against this backdrop, below we highlight a few winning South Korea ETFs like Franklin FTSE South Korea ETF (FLKR - Free Report) and iShares MSCI South Korea ETF (EWY - Free Report) . FLKR may continue its strong performance in the near term, with a positive weighted alpha of 173.04 (as per Barchart.com), while EWY has a positive alpha of 189.19. A positive alpha means the ETF is delivering returns higher than what its risk level and benchmark would predict.
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South Korea ETFs: Quiet AI Winners
Key Takeaways
Asian stocks have been great shape this year, with iShares Asia 50 ETF (AIA - Free Report) gaining 15.2% year to date compared with a 0.6% uptick noticed in State Street SPDR S&P 500 ETF Trust (SPY - Free Report) . Over the past five days, AIA gained about 3.9% while SPY rose only 0.5% (as of Feb. 25, 2026). Among the Asian region, the South Korean market has grabbed specific attention.
iShares MSCI South Korea ETF (EWY - Free Report) has added 41.4% so far this year. The market has been hitting fresh highs lately. South Korea’s Kospi index even crossed the 6,000-mark for the first time ever. The rise in the South Korean market is attributed to the spike in Samsung Electronics and SK Hynix shares, the largest and second-largest market capitalization stocks, thanks to the AI-driven memory semiconductor supercycle, per Maeil Business Newspaper. After all, semiconductors account for a significant share of the country’s market performance.
Inside the Rally
The EWY ETF has surged dramatically over the past one year with about 151% gains. The KOSPI index logged its best growth rate in the 2000s last year thanks to AI-driven semiconductor demand and government reforms. In 2026, the rally has continued strongly, with the index hitting 6,000 amid sustained earnings growth and policy support.
Note that in late Jan. 2026, Samsung reported record quarterly profit due to AI-driven memory demand. Results beat estimates and top Samsung’s own guidance for the quarter, as quoted on CNBC. Meanwhile, SK Hynix too doubled profit in 2025 as memory shortages led to earnings beat, per CNBC.
SK Hynix Inc. shares have gained 12.5% over the past five days, while those are up 50.4% so far this year. Samsung Electronics has added 8.2% over the past week while the stock has surged 58.4% in the year-to-date frame.
Should You Buy South Korea ETFs?
According to Goldman Sachs, as quoted on CNBC, South Korea stands out as Asia-Pacific’s top market, having almost doubled in 2025. The investment bank’s analysts argue the momentum is far from over, projecting Korean equities to surge 120% in 2026.
Per an article from the Korea Times, growth estimates remain broadly aligned, with the IMF forecasting 1.9% real GDP growth, the Bank of Korea 1.8%, and the OECD 2.1%. Moody’s forecasts 1.8% growth for Korea in 2026, thanks to expanding semiconductor exports and stronger investment as the global AI upcycle persists.
Since there is a global chip crunch and strong demand for semiconductors -- driven by artificial intelligence, data centers and advanced electronics -- continues to outpace supply, tech-heavy as well as export-heavy South Korea ETFs stand to gain ahead.
Additionally, Moody’s Investors Service retained South Korea’s “Aa2” credit rating with a stable outlook, as per the article.
ETFs in Focus
Against this backdrop, below we highlight a few winning South Korea ETFs like Franklin FTSE South Korea ETF (FLKR - Free Report) and iShares MSCI South Korea ETF (EWY - Free Report) . FLKR may continue its strong performance in the near term, with a positive weighted alpha of 173.04 (as per Barchart.com), while EWY has a positive alpha of 189.19. A positive alpha means the ETF is delivering returns higher than what its risk level and benchmark would predict.