South Korea’s stock market capitalization has surpassed India’s to become the world’s sixth-largest equity market, fueled by a powerful rally in artificial intelligence (AI) semiconductor stocks led by Samsung Electronics and SK hynix.
According to Bloomberg, the total market capitalization of South Korea’s benchmark stock market reached $5.04 trillion as of June 1, marking an 86% surge from the beginning of the year. India’s stock market capitalization, by comparison, stood at $4.84 trillion after declining nearly 9% over the same period.
Bloomberg said the calculation was based on the market value of all listed and freely traded shares, excluding exchange-traded funds (ETFs) and American depositary receipts (ADRs).
The sharp rise in South Korean equities has been driven largely by booming demand for AI memory semiconductors. Samsung Electronics and SK hynix, two of the world’s leading memory chipmakers, have emerged as major beneficiaries of the global AI investment wave as demand for high-bandwidth memory (HBM) chips used in AI servers continues to soar.
SK hynix has strengthened its position as a dominant supplier of HBM chips for AI accelerators, while Samsung Electronics has also gained momentum on expectations for expanded AI memory production and recovery in its foundry business. The two companies have led the broader rally in the Kospi index, with investors pouring into semiconductor-related shares amid expectations of a prolonged AI supercycle.
Foreign investor inflows into South Korea have also accelerated this year, supported by optimism over corporate governance reforms and shareholder-friendly policies aimed at narrowing the so-called “Korea discount.” Measures such as higher dividends, treasury share cancellations, and corporate value-up programs have improved sentiment toward Korean equities among global investors.
With the latest surge, South Korea’s stock market has overtaken Canada, Germany, the United Kingdom, and France in global market capitalization rankings. The only markets now larger than South Korea are the United States, mainland China, Japan, Hong Kong, and Taiwan.
Taiwan has also benefited from the AI boom thanks to its dominant semiconductor supply chain, highlighting a broader shift of global capital toward Asian technology markets linked to AI infrastructure expansion.
India, meanwhile, has struggled with weakening foreign investment flows, currency depreciation, and concerns over stretched valuations. Analysts also point to the country’s relative lack of globally dominant AI infrastructure and semiconductor companies compared with South Korea and Taiwan.
Despite the strong rally, market experts caution that South Korea will need to sustain corporate governance reforms and diversify beyond semiconductors to maintain its elevated market status.
Ross McGeary, senior analyst at UK-based asset manager Asset Value Investors, told Bloomberg that “the memory cycle has been driving the rally,” adding that the key question is whether South Korea can maintain the market re-rating through meaningful corporate governance reform.
According to International Monetary Fund (IMF) estimates, South Korea’s gross domestic product (GDP) stands at approximately $1.93 trillion, significantly smaller than India’s $4.15 trillion economy. Nevertheless, South Korea’s rise above India in stock market value underscores the growing influence of AI semiconductors in global financial markets.
