[R&E] KOSPI Surpasses 8,000 for the First Time in History, Driven by Samsung Electro-Mechanics' MLCC Strength and Semiconductor Industry Improvement

[R&E: Research & Epoch] This is News Epoch's signature report, offering a perspective on a new era of investment through an integrated analysis of global financial data and domestic securities firms' research.

Global Market Brief

On the previous trading day (Tuesday, May 26), the New York stock market closed mixed, supported by the strength of tech stocks. The Dow Jones Industrial Average fell 0.23% to 50,461.68p, but the S&P 500 Index rose 0.61% to 7,519.12p, and the NASDAQ Composite Index climbed 1.19% to 26,656.18p, both reaching all-time highs. The Philadelphia Semiconductor Index surged 5.53%, leading the tech rally. The U.S. Conference Board's Consumer Confidence Index for May recorded 93.1, exceeding market expectations (91.9) and contributing to an improvement in investor sentiment. This suggests that investment sentiment centered on technology stocks remains robust even amid concerns about high inflation.

However, the vulnerability of the real economy was also simultaneously revealed, with the U.S. credit card loan delinquency rate reaching its highest level since the financial crisis, and the commercial real estate loan delinquency rate expected to soar from the pre-pandemic level of 1-2% to approximately 12% by 2026. Tensions in the Middle East also remain. Upon the news that the U.S. launched an airstrike on southern Iran and Iran warned of immediate retaliation, international oil prices briefly narrowed their losses but closed at $93.9, down 2.8% from the previous day. This indicates that oil price volatility may expand while geopolitical anxieties remain latent.

Domestic Market Overview

On the previous trading day (Tuesday, May 26), the domestic stock market closed with the KOSPI (KOSPI: 000010) surpassing 8,000p for the first time in history, finishing up 2.55% at 8,047.51p. The KOSDAQ (KOSDAQ: 000020) also showed strength, rising 0.98% to 1,172.52p. This is analyzed as the result of foreigners and institutions continuing net purchases for six consecutive trading days, in sync with the semiconductor-driven upward rally in the U.S. stock market. The upward trend in the electrical and electronic sector was particularly prominent, with semiconductor and component stocks strongly leading the market.

The USD/KRW exchange rate closed down 3.7 won at 1,508.0 won, and the 1-month NDF exchange rate also formed at 1,505.9 won, showing a trend of Korean won strength. The domestic bond market closed strong, recording a drop in interest rates, boosted by the decline in international oil prices and falling U.S. Treasury yields. This suggests that the tech-centric global bull market has strengthened optimistic sentiment in the domestic stock market.

Key Industry Issues and Insights

The semiconductor and related component industries, which will serve as core drivers of the AI era, showed strong upward trends in domestic and overseas stock markets the previous day. Samsung Electro-Mechanics (KOSPI: 009150) rose 17.31% from the previous day, renewing its intraday high, as MLCCs emerged as core AI components. The 2027 MLCC blended average selling price increase assumption was revised upward from the previous 22.6% to 27.3%, and the 2027 operating profit estimate was also raised by 3.8%. This is understood to be the result of price increases toward distribution channels and long-term MLCC supply contracts with North American clients that began late last year.

LG Innotek (KOSPI: 011070) also rose 23.6%, recording an intraday high. In overseas markets, Micron (NASDAQ: MU)'s stock price surged 19.29%, and its target price was massively upgraded from $535 to $1,625. This is interpreted as a reflection of increasing HBM demand and optimistic forecasts for the AI semiconductor market. Daeduck Electronics (KOSPI: 008060), a domestic AI substrate manufacturer, is responding to market changes by investing over 800 billion won in AI substrates. This trend suggests that the strategic importance of South Korean semiconductor and component companies within the global AI ecosystem has elevated to the next level.

Volatility in the shipping and energy industries is expanding as geopolitical risks intensify. Frontline (NYSE: FRO), a global tanker shipping company, reported first-quarter revenue of $930 million, up 117% year-on-year, and operating profit of $590 million, up 528%. Its operating profit margin reached 63.0%. This is the result of a 178% year-on-year increase in the average freight rates of Very Large Crude Carriers (VLCCs) in the first quarter.

Second-quarter VLCC freight rates are currently 76% higher compared to the first quarter, and the second-quarter fixture rate so far has reached 82% based on VLCCs. Passing through the Strait of Hormuz is impossible for more than 140 vessels per day, and it was revealed that the proportion of sanctioned vessels among VLCCs has risen to 17%. These data show that supply chain instability originating from the Middle East is causing ocean transportation costs to rise steeply, allowing certain shipping companies to generate massive profits from it. The Singapore complex refining margin recorded $16.1 per barrel on May 26, maintaining a level significantly exceeding its historical average ($6.0) and breakeven point ($4.5).

SK (KOSPI: 034730) is increasing its corporate value, driven by the even growth of its subsidiaries and efforts to improve its governance structure. SK's net debt in the first quarter decreased by 1.3 trillion won compared to the previous quarter, and last month it purchased 400 billion won worth of SK ecoplant common and convertible preferred shares held by financial investors, raising its stake from 66.7% to 71.2%.

Its core subsidiary, SK ecoplant, reported first-quarter 2026 revenue of 4.9 trillion won, up 99.3% year-on-year, and an operating profit of 931.4 billion won, up 1261.9%. In particular, the asset lifecycle sector drove the growth, recording 2.4 trillion won in revenue (+323.0%) and 791.3 billion won in operating profit (+3492.1%). The high-tech sector also recorded 1.5 trillion won in revenue (+74.7%) and turned a profit with an operating profit of 53.9 billion won. These figures prove that SK is focusing on resolving its holding company discount through aggressive portfolio reorganization and increasing subsidiary value, and that environmental and high-tech solution businesses have established themselves as the group's new growth engines.

Market Signals

• U.S. Consumer Confidence Index: The U.S. Conference Board's Consumer Confidence Index for May was 93.1, exceeding market expectations (91.9) but slowing by 0.7p compared to the previous month (93.8).

• U.S. Credit Card Delinquency Rate: The U.S. credit card loan delinquency rate recorded its highest level since the financial crisis, and the commercial real estate loan delinquency rate backed by offices soared from 1-2% pre-pandemic to approximately 12% by 2026.

• LG Treasury Stock Cancellation: LG (KOSPI: 003550) strengthened its shareholder return policy by canceling its entire treasury stock worth 350 billion won.

• Domestic Government Bond Yields: The 3-year government bond yield fell 6.3bp to 3.662%, and the 10-year yield dropped 5.5bp to 4.071%, leading the strength of the domestic bond market.

• K-Beauty Amazon BSR: The K-Beauty Universe (total score of Amazon Best Seller Ranking) slowed by 83pt from the previous week to 1,583pt this week, but SKIN1004 (Beauty Skin) and CENTELLIAN 24 (Dongkook Pharmaceutical) performed well, rising 25pt and 23pt respectively.

Epoch View: Investment Implications

The KOSPI's historic first-time breakthrough above the 8,000 mark the previous day clearly shows that global AI technological innovations are leading to earnings improvements for major domestic IT component companies. The rise in Samsung Electro-Mechanics' MLCC average selling price and the upgrade of Micron's target price prove that, moving beyond mere expectations for AI technology, a re-evaluation of value across the entire industry is being triggered.

However, credit default risks within the U.S. economy and geopolitical tensions originating from the Middle East act as potential risks that could constrain the market's upward momentum. Amid these multiple variables, it is judged that a strategy of reorganizing portfolios around AI beneficiaries and responding to market uncertainties based on solid earnings growth is effective for the domestic stock market. The market is expected to find a balance between new growth engines created by technological innovations and traditional macroeconomic risks.

This content was generated through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms and global financial media in real time. We clarify that this is an objective summary based on the collected data and does not constitute an investment solicitation or recommendation for specific stocks.