Column · 2026-06-30
[Kwangsoo's Take] The Structural Roots of KOSPI's Rapid Rise and Volatility
It took the KOSPI 86 days to climb from 3,000 to 4,000, 63 days from 4,000 to 5,000, and 52 days from 5,000 to 6,000. But it took just 13 days to go from 6,000 to 7,000, another 13 days from 7,000 to 8,000, and it has now spent 23 days oscillating in the 8,000-9,000 range. The single biggest driver of volatility in asset markets is the speed of the rise, and the KOSPI's recent pace has been unusually fast by historical comparison.
The current back-and-forth around 8,000 may in fact be a healthy consolidation process, and the longer it persists, the more it could underpin future market stability.
Single-stock leveraged ETFs tracking Samsung Electronics and SK hynix were identified as another key driver of volatility. To maintain their target returns, these products mechanically rebalance — buying more when the underlying rises and selling when it falls — and because their assets under management (AUM) keep growing, the scale of these rebalancing trades grows too, amplifying volatility. For example, a product with won 1 trillion in AUM that rises 3% in a day must buy an additional won 30 billion worth of spot and futures positions.
Given this structural issue, investors were advised to avoid single-stock leveraged ETFs on Samsung Electronics and SK hynix and instead favor direct investment in individual semiconductor stocks. Interestingly, data from the Korea Capital Market Institute shows retail investors have been buying these leveraged products when prices fall and selling when they rise — a contrarian pattern suggesting the market may be self-correcting its own volatility. A call was also made for securities broadcasters to stop running leveraged ETF advertisements.
The Historical Context of Semiconductor Investment and Korea's Reshaped Industrial Map
The discussion recalled the 1983 Tokyo Declaration, when Samsung chairman Lee Byung-chul announced Korea's entry into semiconductors despite meeting none of the conventional prerequisites for a viable chip industry — a population of over 100 million, per capita income above $10,000, and the ability to absorb 50% of output domestically. The world was skeptical, yet Samsung Electronics developed the 64K DRAM within six months, becoming only the third country after the US and Japan to do so.
Even after DRAM prices collapsed in 1990 and Samsung Electronics posted losses in the trillions of won, the company announced a large-scale investment plan in 1992 rather than retreating — a decision that led to the world's first 64M DRAM in 1992 and the top global semiconductor ranking in 1993. That historical lesson — that no achievement comes without investment — was cited as directly applicable to the newly announced won 800 trillion cluster plan.
The blueprint was likened to nation-defining infrastructure projects such as the Gyeongbu Expressway or the high-speed internet buildout, representing a comparable reshaping of Korea's industrial map. Where the country's industrial axis once ran diagonally from Seoul to Busan, a new northern branch connecting Gwangju and the Honam region is set to add a fork, transforming the map into a Y-shaped industrial and economic structure.
The Honam region already has 23GW of total power generation capacity, 47%, or more than 10GW, of which is solar, and its coastal location gives it an advantage in water supply — factors cited as rational grounds for the regional allocation. The view was strongly emphasized that this should be understood not as a politically motivated regional favor but as a decisive response to Korea's falling potential growth rate and shrinking job opportunities for young people.