South Korea’s Corporate Governance Revolution

South Korea’s stock market has stunned in 2025, with the KOSPI 200 index soaring 69%, far outpacing the S&P 500’s 15% rise. AI hype around chipmakers like Samsung Electronics and SK Hynix played a role, but the main driver is the government’s “value-up” push to improve corporate governance and eliminate the “Korea discount.” Launched in 2024, this reform gained momentum under President Lee Jae-myung. Amendments to the Commercial Act strengthened managers’ duties to shareholders and empowered minority investors through measures like electronic shareholder meetings and revised voting rules. Another wave of reforms, likely mandating the retirement of treasury shares, is expected by year-end.

Hundreds of firms have pledged to cancel treasury shares, and share buybacks have more than doubled since 2023. Activist investors are gaining ground: Infovine, a software firm, raised dividends by a third and bought back shares after a 2024 campaign, tripling its stock price. KB Financial, urged to prioritize shareholder returns over foreign acquisitions, saw its stock more than double since early 2024. Yet, family-controlled firms like Samsung C&T resist change, rejecting activist proposals for higher dividends. Over half of KOSPI 200 firms trade below book value, showing the Korea discount persists.

Source: AP

Samsung and SK Hynix Lead AI with OpenAI Partnership

Samsung Electronics and SK Hynix surged to multiyear highs after inking deals with OpenAI for its Stargate AI project, boosting their combined market value by over $30 billion. The initiative aims to expand AI chip supply and data centers in South Korea. OpenAI’s CEO Sam Altman praised Korea’s tech talent, infrastructure, and government support. On October 2, SK Hynix shares jumped 9.9% and Samsung Electronics 3.5%, lifting the KOSPI 2.7% to a record high.

SK Hynix, with a 62% share of the HBM market, will supply chips for Stargate and expand AI chip production to meet demand for 900,000 wafers monthly. Samsung C&T and Samsung Heavy Industries will develop floating data centers, while Samsung SDS will design and operate Stargate facilities. Samsung Electronics is accelerating HBM4 development to close the gap with SK Hynix. Together, the two dominate 80% of the global HBM market.

Bolstering Global Competitiveness

Both stories highlight South Korea’s drive to enhance global competitiveness through corporate reform and AI innovation. The value-up policy boosts shareholder value, while partnerships with OpenAI showcase Korea’s semiconductor and AI infrastructure prowess. Challenges like family-dominated governance remain, but Samsung, SK Hynix, and government reforms are propelling South Korea toward a new economic leap.