South Korea, though small in size, has become a major winner in the 2026 AI boom thanks to its dominance in high-bandwidth memory (HBM) production. Key companies SK Hynix and Samsung Electronics, which together make up nearly half of the iShares MSCI South Korea ETF (EWY), have seen massive stock gains of 267% and 187% respectively this year. The surge is fueled by strong demand for AI infrastructure, where memory supply remains tight and prices high. Despite doubling in value, these stocks remain attractively valued with low forward price-to-earnings ratios and huge expected revenue growth. This concentrated exposure to AI-related memory technology has made South Korea's market outperform the broader U.S. market and other Asian ETFs by a wide margin.
