South Korean chipmakers Samsung Electronics and SK Hynix have seen their share prices surge dramatically in the first half of 2026, propelling the country’s Kospi index to its strongest six-month performance in decades. Samsung’s stock has jumped 169% since January, while SK Hynix has risen 303%, according to analysis of London Stock Exchange Group data. Both companies have reported a sharp increase in demand as artificial intelligence developers compete for the memory chips needed to power their datacentres.
The surge reflects an extraordinary boom in the semiconductor market, driven overwhelmingly by AI. The global semiconductor market is on course to reach $1.51 trillion in 2026, a 90% increase on the previous year, with the memory segment alone expected to surge by roughly 250% to more than $800bn, industry forecasts show. Gartner projects worldwide semiconductor revenue will exceed $1.3 trillion in 2026, with memory revenue tripling – a phenomenon analysts have dubbed “memflation”. AI semiconductors are expected to account for around 30% of total semiconductor revenue this year, as high-bandwidth memory (HBM) is reallocated towards AI data centres, tightening supply in mainstream DRAM and NAND markets.
McKinsey and Company projects $7 trillion in data centre investment through 2030, $5.2 trillion of which will be dedicated solely to AI workloads. Nvidia remains the dominant player, reporting revenue of $215.9bn in its fiscal year 2026, a 65% rise year-on-year, with data centre revenue making up roughly 90% of that figure. The company commands an estimated 85-90% share of the AI accelerator GPU market and unveiled its next-generation Vera Rubin architecture at GTC 2026, built on TSMC’s N3P process with HBM4 memory. Nvidia expects $1 trillion in cumulative revenue through 2027 from its Rubin and current-generation Blackwell chips. AMD, considered Nvidia’s most credible challenger in data centre GPUs, released its Ryzen AI Embedded P100 and X100 Series processors in January. TSMC remains the critical foundry bottleneck in the AI hardware supply chain, while Intel has released its Gaudi 3 GPU chip, designed to be faster and more power-efficient than Nvidia’s H100.
US chipmakers have also seen extraordinary gains. Sandisk shares are up 780% in 2026 and have soared 4,510% over the past 12 months. Western Digital has gained 240%, Micron is up 296%, and Seagate has risen 226%, with two trading days left until the second half of the year. Dan Coatsworth, head of markets at investment platform AJ Bell, said the four US companies had produced “the kind of gains in six months you might normally expect over decades with investing”. He added: “Demand exceeding constrained supply led to a surge in memory chip prices and took suppliers’ shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth.”
The surge in chip stocks has been underpinned by aggressive government-backed investment plans. On Monday, South Korea’s president, Lee Jae Myung, pledged to cement the country’s leadership in the industry with investments worth more than $576bn (£435m) over several years, covering semiconductors, AI datacentres and robotics. Under the plan, Samsung and SK Hynix will build a total of four fabrication plants in the country’s south-west region, with a combined investment of around 800 trillion won ($518bn to $520bn). The government also unveiled a KRW 340 trillion ($255bn) semiconductor investment roadmap through 2026, offering equipment investment tax credits of 20-30% and R&D tax credits of 30-50%. “We must secure the core elements of artificial intelligence faster than any other country,” President Lee said. The strategy includes building a nationwide semiconductor ecosystem, with existing hubs expanding production, the central Chungcheong region specialising in chip packaging, and data centres being built across the country.
In the UK, the government has launched an “AI hardware plan” involving more than £1bn in AI computing infrastructure and an expansion of its AI Research Resource. An £80m skills package is dedicated to semiconductor training, PhD support and chip design pathways. The plan includes a £400m procurement opportunity for specialised chips as part of a £750m heterogeneous AI supercomputer for the AI Research Resource, with the aim of building a £37bn chip industry that captures 5% of the global market.
The ripple effects of the chip demand are already reaching consumers. Apple last week blamed the rise in memory chip costs for increasing prices on its iPads and MacBooks; the entry-level MacBook Neo rose from $599 to $699. Analysts anticipate iPhone prices may also rise. The company is also reportedly seeking clearance from the Trump administration to buy memory chips from CXMT, a Chinese company blacklisted by the Pentagon. Apple shares fell 4.5% on June 26.
Market rotation and broader trends
Even as chip stocks soared, a significant rotation has taken place. Investors have shifted holdings out of large software companies into hardware stocks, with shares in the hyperscalers – the companies rolling out AI services – falling in recent weeks. Microsoft has shed more than 24% of its value so far in 2026, closing at a one-year low last week. The sell-off reflects anxiety over the huge spending plans announced by leading AI companies. Microsoft expects to spend nearly $190bn on capital expenditure in calendar year 2026, primarily for AI infrastructure, and its Q3 FY2026 revenue reached $82.9bn, with Azure and other cloud services revenue growing 40%. The four largest hyperscalers – Amazon, Google, Microsoft and Meta – collectively plan to spend $25bn in 2026, a 77% increase from 2025. Total worldwide AI spending is projected to hit $2.52 trillion this year, up 44% year-on-year.
There are signs that the chip stock boom may be faltering, with shares pulling back from recent highs as investors rotate out of tech into other sectors. “Having piled in to AI and tech since the end of March, there is a desire to protect profits, and investors continue to be in a mood to sell first and ask questions later,” said Chris Beauchamp, chief market analyst at trading and investment platform IG. Dell’s shares fell more than 8% on June 26, reflecting broader tech jitters.
Despite the recent wobble, stock markets have posted solid gains in the first half of 2026. Japan’s Nikkei 225 climbed 38%. The UK’s FTSE 100 gained 5.8%, having fallen back from a record high at the end of February as the Iran war hit share prices; the index was lifted by takeover offers for Beazley, DCC, Glencore, Schroders, Segro and Intertek. The US S&P 500 has risen 7.4% to 7,354 points at the end of last week. Brent crude oil began the year at $60 a barrel and is ending June about $12 higher, though at the end of April its price had doubled to more than $120 as the closure of the Strait of Hormuz fuelled supply shortages. Brent was trading around $72.87 on June 29, 2026, still 9.19% higher than a year ago, amid geopolitical tensions and scheduled peace talks in Doha.
The appetite for memory chips shows no sign of easing. Apple’s entry-level MacBook Neo increased from $599 to $699, a direct consequence of the AI-driven scramble for components.
