Samsung Electronics labor deal clinches dramatic breakthrough as KOSPI tops 7,700, Nvidia earnings beat sends SK Hynix up 11%

The KOSPI opened strong on news of Samsung Electronics' dramatic labor deal, rising more than 7% intraday to reclaim the 7,740 level. It later extended gains to 7,766 points, while the KOSDAQ rose more than 5% to pass the 1,110 mark. Both markets triggered buy-side sidecars early in the session.

On the flow side, foreign investors trimmed their selling but still posted net sales of roughly 640 billion won, while institutions provided support with net buying of about 2 trillion won. Financial investment firms, insurers, asset managers, banks and pension funds were nearly all net buyers, with financial investment firms leading the charge. The won opened lower at 1,499 before rebounding slightly to around 1,504.

Three benchmark levels came into view simultaneously: KOSPI 8,000, Samsung Electronics at 300,000 won, and SK Hynix at 2 million won. Samsung Electronics rose about 6% to reach 298,000 won, just shy of the 300,000 mark, while SK Hynix surged more than 11% to move between 1.937 million and 1.947 million won, setting a fresh intraday high. That marked an unusual single-day surge of over 10% for a company with a market cap exceeding 1,300 trillion won.

Still, the 10-year U.S. Treasury yield remained stuck near 4.592%, unwilling to ease, underscoring that rate-related risk has not disappeared. The session was described as one where AI earnings momentum carried the market through rate-driven fears. LG Electronics erased its prior three-day decline in a single day with a 26% jump, Hyundai Mobis climbed about 17%, and power equipment names such as LS Electric surged roughly 13%.

Samsung Electronics' union and management announced a tentative wage agreement at a briefing held at 10:30 p.m. the previous night. A ratification vote among all union members will run from May 23 to 28, requiring turnout of more than half of members and majority approval for the deal to take effect. The core change keeps the existing excess-profit bonus scheme intact while creating a new special bonus exclusively for the semiconductor division, funded by 10.5% of the jointly agreed business performance, split 40% common and 60% by division.

The payment method stands out: rather than cash, the bonus will be paid in treasury shares, with one-third sellable immediately and the remaining two-thirds subject to one- and two-year sale restrictions respectively. This structure effectively mirrors restricted stock units and aligns the interests of workers and shareholders around the stock price. Even the loss-making division will receive a minimum payout, calculated at roughly 60% of the common-fund payout rate, though it will not start until the 2027 performance year and will run for ten years.

One point of contention is that payouts after 2029 are conditional on the device solutions division achieving 10 trillion won... rather, 100 trillion won in operating profit, following a prior three-year period tied to a 200 trillion won threshold. Analysts noted this reflects standard three-year forecasting practice rather than any internal expectation that performance will weaken thereafter. Consensus estimates put Samsung Electronics' operating profit at 34.9 trillion won in 2026, 44.1 trillion won in 2027 and 42.0 trillion won in 2028.

Under the deal, per-employee special bonuses in the semiconductor division, combined with the existing bonus formula's increase, are estimated to reach around 600 million won. This was read as management retaining the legitimacy of the existing bonus framework while the union secured a practical win of a 0.5 percentage point higher funding ratio than SK Hynix's formula. With the estimated treasury-share payout of about 31 trillion won exceeding Samsung Electronics' current treasury share holdings of roughly 23 trillion won, expectations rose that the company will need to purchase additional treasury shares going forward.

The bonus level, now near global top-tier, is expected to boost Samsung's competitiveness in attracting semiconductor talent. Micron's move to open a Korean office was cited as an early sign of intensifying competition among global firms for talent based in Korea.

Nvidia reported fiscal 2027 first-quarter revenue of $81.6 billion, beating the consensus estimate of about $79 billion and up 85% year over year. Earnings per share also topped estimates, rising 140% from a year earlier. The key data center segment posted revenue of $75.2 billion, above the expected $73 billion and up 92% year over year, while gross margin came in at 75%, above the 74.5% forecast, extending Nvidia's streak of record results to 12 consecutive quarters.

On the earnings call, Nvidia said its currently shipping Blackwell chip is sold out, and that its next-generation accelerator combining the Vera CPU and Rubin GPU, dubbed Vera Rubin, would drive a full upgrade cycle. The company reaffirmed its strategy of dominating the entire AI hardware stack beyond GPUs, spanning CPUs and its NVLink interconnect technology. Notably, the results did not include any China revenue, underscoring that Nvidia hit these numbers even without progress on China market access following the recent U.S.-China summit.

The market's particular focus was on the next-generation HBM supply timeline for Vera Rubin. Concerns had lingered over performance and yield issues, but Nvidia's confirmation that full-scale production would begin in the third quarter was interpreted as a sign that SK Hynix had resolved the relevant issues. This was seen as reaffirming that the Nvidia-TSMC-Korean semiconductor triangular supply chain alliance remains intact, sending SK Hynix shares up more than 11% to a fresh intraday high of 1.947 million won.

Notably, while Nvidia's operating margin stood at 65.6%, SK Hynix's exceeded 70%, prompting observations that the profitability hierarchy within the semiconductor supply chain is shifting. At a Dell Technologies event, Jensen Huang made an unannounced appearance and said memory and advanced chip shortages remain the biggest bottleneck for the AI industry, likely to persist for years, adding that he had discussed the next three years' roadmap with SK Hynix.

Taiwan's Taiex index rose more than 3.7%, approaching its all-time high, while Japan's Nikkei gained 3.5% to pass the 60,000 mark. In contrast, Shanghai's Composite Index, which had rallied on semiconductor strength after the U.S.-China summit, was roughly flat, standing in contrast to the rally elsewhere in Asia.

The U.S. 30-year Treasury yield climbed to 5.19%, its highest level since the financial crisis, weighing on markets broadly. Since bond prices and yields move inversely, the rise reflects reports that so-called bond vigilantes, large sovereign and institutional holders, have been aggressively selling government bonds, seen as a warning signal about fiscal conditions.

Rising interest rates directly burden tech and biotech companies that need to raise funds for data centers, new technology or plant construction. Beyond making new financing harder, higher rates raise the cost of servicing existing debt, raising concerns that financially weaker firms could actually fail if conditions worsen. This is why rising bond yields are seen as ultimately weighing on the broader stock market.

Market participants are increasingly calling on the Trump administration and the Federal Reserve to respond to these bond vigilante warnings. First, the market needs a signal that fiscal problems will not worsen further; second, a signal that the Fed will not rush to raise rates. Treasury Secretary Scott Bessent's actions are being closely watched in this context, with various policy responses possible, including bond purchases to absorb excess supply in the market.

According to an exclusive Wall Street Journal report, OpenAI plans to file for an IPO as early as May 22, targeting a listing around September. With ChatGPT's market share gradually eroding amid intensifying competition, the move is seen as aimed at raising capital to boost investment and reclaim share. The report also touched on the long-running feud with Elon Musk, who has criticized OpenAI's shift from its original nonprofit mission toward this listing.

SpaceX has completed its formal IPO filing and is set to begin its roadshow on June 8, with pricing targeted for June 11 and listing for June 12. It would be the largest-ever IPO by a space company, with proceeds earmarked for building space-based AI data centers and advancing the Starship rocket program. Starship Version 3 is scheduled to launch this Friday at 7:30 a.m. Korea time, ahead of the listing, likely to be used to bolster the company's valuation narrative.

SpaceX posted a first-quarter net loss stemming from its merger with AI company xAI, though its Starlink satellite internet and rocket launch services remain profitable. Mega IPOs typically see limited stock appreciation in the first year after listing, suggesting SpaceX may go through a valuation re-rating period rather than rallying immediately after its debut.

This wave of mega IPOs could draw significant liquidity out of the broader market, given their scale. Some observers suggested the timing also reflects a macro calculation to raise capital while liquidity remains available, ahead of concerns that funding conditions could tighten later in the year if Treasury yields keep climbing.

Domestically relevant investment names tied to SpaceX include launch vehicle and service providers Hanwha Aerospace, Innospace and Perigee Aerospace; satellite makers Hanwha Systems, Satrec Initiative, Lumir and Nara Space Technology; communication satellite firm Intellian Technologies and AP Satellite; and ground station operator Contec. Core space component makers cited include Hanwha Aerospace, Hyundai Rotem, Vitzrotech and Space Solution, along with special alloy maker SeAH Besteel Holdings, while Mirae Asset Securities was noted as holding a pre-IPO stake in SpaceX that stands to benefit from the listing.

Korean media outlets have increasingly framed heavy foreign selling as evidence of a bubble, portraying retail investors who absorb those sales as foolish, a trend that draws sharp criticism. Examples cited included headlines from major Korean economic dailies reading things like 'the day foreigners cash out on ants has come,' 'let the ants buy,' 'foreigners dump and retail absorbs every bit,' and 'ants as cannon fodder.'

Such coverage was criticized for lacking understanding and respect for domestic retail investors. Given that individual investors' buying and confidence are what actually sustain the market, mockery in this style only stokes anxiety among market participants. It was also noted that while the U.S. accurately refers to individual investors as 'retail investors,' Korean media has habitually used the derogatory term 'ants.'

A distinction was drawn between the behavior of foreign and domestic investors. Foreign capital tends to chase profits and exit quickly once gains are realized, while domestic investors tend to hold longer based on trust in companies and the country. From this view, markets with a high foreign ownership share and greater volatility could actually be riskier.

The commentary closed by proposing the alternative term 'national investors.' Investing was framed as not just a matter of technology and economics but also of culture and sentiment, arguing that a healthy investment culture can only take root once media shifts its reporting grammar to one that respects individual investors.