[Yonhap]
[Yonhap]

As the Kospi surged past 8,800 on Monday and edged toward the so-called "9,000-pi" milestone, analysts warned that the rally masks a deepening divide — with semiconductor stocks driving nearly all the gains while the rest of the market lags far behind.

Eugene Investment & Securities said Monday that the Kospi, excluding semiconductors, is estimated at only 4,100 to 4,200, adding that the underperformance of non-semiconductor stocks that began in 2025 has worsened further this year.

In a report released that day, analyst Heo Jae-hwan said the combined market capitalization of the three major memory chip makers — Samsung Electronics, Micron and SK Hynix — has collectively surpassed $1 trillion. He added that while memory chip share prices have surged since April, their 12-month forward price-to-earnings ratios remain at roughly six to 10 times, keeping the investment appeal of the semiconductor sector high.

He said the rise in semiconductor share prices is as steep as the dot-com bubble, yet factors that could halt it are hard to identify. He estimated that semiconductors will account for the upper 60 percent range of total Kospi operating profit this year.

Still, Heo cautioned that the polarization and sense of relative deprivation driven by semiconductors are intensifying not only in society at large but within the stock market as well.

IT hardware is the only sector to have increased its share of total market capitalization this year, and most other industries have struggled to keep pace with the Kospi's overall gains.

Heo said operating profit for non-semiconductor sectors is expected to grow 40 percent this year, but noted that semiconductor earnings are expanding so rapidly that the profit share of most other industries is likely to shrink.

"The concentration itself is not a market peak or a negative signal, but it is not healthy," he said. "The bigger problem is that there are few signs of this concentration easing."

He explained that the 12-month forward PER for the Kospi excluding semiconductors stands at 11 times, meaning non-semiconductor sectors offer limited valuation appeal relative to chips, making a broad sector rotation difficult.

He particularly highlighted pharmaceuticals, biotech and the Kosdaq market as the most sidelined. He noted that the Kosdaq has historically outperformed when non-semiconductor exports improve, suggesting that biotech and Kosdaq stocks are unlikely to recover until semiconductor sector dominance begins to fade.

Heo forecast that June trading will be calmer than May as monetary policy globally trends toward tightening, though he said semiconductor and materials-related sectors should still hold up relatively well.

Some analysts see the concentration as a hallmark of the late stages of a bull market. Lee Eun-taek of KB Securities said May 30 that concentration tends to intensify rather than ease as a bubble approaches its final phase. "When concentration begins to unwind, it is not a welcome sign of broadening — it is a harbinger of bubble collapse," he said.


rainbow@heraldcorp.com