Shares in chipmakers have surged in the first half of 2026 as investors piled into companies that make the hardware underpinning the AI boom. Semiconductor and memory chip manufacturers have seen their profits soar, driving Asia Pacific stock markets sharply higher. South Korea’s Kospi index is up 123% this year, its strongest first half since at least 1990, driven by the electronics group Samsung, whose share price has jumped 169% so far this year, and SK Hynix, which has risen 303% since the start of January.
Both companies have reported a big increase in demand this year, as AI companies have competed for chips to power their datacentres. On Monday, the president, Lee Jae Myung, pledged to cement South Korea’s leadership in the industry with investments worth more than $576bn 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.
US chipmakers have also been in great demand, with shares in Sandisk up 780% in 2026, and rocketing by 4,510% over the last 12 months. The digital storage company Western Digital has gained 240% this year, while Micron is up 296% and Seagate has risen 226%. The four US companies have produced the kind of gains in six months that investors might normally expect over decades.
Demand exceeding constrained supply has led to a surge in memory chip prices, taking suppliers’ shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth. Apple blamed the rise in the cost of memory chips for an increase in its iPad and MacBook prices last week.
The company is also reportedly asking the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon has blacklisted. Shares in the hyperscalers, which are rolling out AI services, have fallen in recent weeks as investors shifted their holdings out of software and into hardware stocks. Microsoft is down 24% during 2026 and hit a one-year low last week.
Some investors have balked at the huge spending plans announced by leading AI companies, leading to higher borrowing and eating up the firms’ cashflow, making them more capital-intensive businesses. There have been signs in recent days that the chip stock boom is faltering, with shares falling from their recent highs as investors rotated out of tech into other sectors. Having piled into 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.
Despite this, there have been solid stock market gains over the first half of 2026, with Japan’s Nikkei climbing 38%. The UK’s FTSE 100 has gained 5.8%, having fallen back from a record high at the end of February as the Iran war hit share prices. The London stock market was lifted by takeover offers for several companies.
Brent crude oil began the year at $60 a barrel and is ending June about $12 higher. The US S&P 500 share index has gained 7.4% so far this year, to 7,354 points at the end of last week. Mark Haefele, the chief investment officer at UBS Global Wealth Management, predicts the US market will climb over the next year, lifting the S&P 500 to 8,200 points by June 2027.
Our base case sees continued strength in AI capital expenditure, a resilient US economy, ongoing fiscal spending around the world, and strong credit creation continuing to support corporate earnings growth and markets more broadly.
