The South Korean semiconductor giant, SK Hynix, secured the second spot in the market capitalisation ranking of the Korean Stock Exchange at the close of 2023, according to Nikkei Asia. This achievement was largely due to the rise in its stock prices amid projections of a semiconductor market rebound.
Performance of Large Companies Boosts KOSPI Index
The Korean Composite Stock Price Index (KOSPI) saw an 18.7% growth in 2023, largely attributed to the increased market capitalisation of six out of the top 10 biggest companies in the country. In contrast, 2022 experienced a slump in the shares of all these top firms—except for LG Energy Solution, which had its listing that year—mainly due to the downturn in the chip market and the soaring interest rates.
Key Players Lead Growth
Amongst all, Samsung Electronics stood as the indisputable leader, witnessing a 42% rise in its market capitalisation, amounting to 468 trillion won (approximately $356 billion), on the expected end of the chip market downturn. Likewise, SK Hynix, boosted by increasing sales of its DRAM chips, saw its market capitalisation skyrocket by 89% to reach 103 trillion won (around $78 billion). LG Energy Solution, a battery manufacturer ranking third, underwent a minor 2% fall in its capitalisation to 100 trillion won (roughly $76 billion).
The rise in stock prices was also led by steelmaker company, POSCO Holdings, which saw an 81% increase in amid expectations of rising revenues from battery manufacturing materials, following the complete restoration of its main factory after typhoon-induced devastations.
Hyundai Motor and its subsidiary, Kia, also ascended the ranking due to boosted high-end car sales in Europe and the United States. Hyundai’s market capitalisation surged by 33% to 43 trillion won (approximately $33 billion), while Kia recorded a 67% increase, standing at 40 trillion won (around $30 billion).
Battery Producers and Digital Companies Face Challenges
However, the outcome was not as bright for battery-associated companies, with LG Chem, the parent company of LG Energy Solution, and major battery manufacturer Samsung SDI falling down the ranks.
The rise in electronic vehicle sales did not meet expectations, leading to an increased risk of oversupply due to substantial investments. Chain supply uncertainties triggered by tensions between the United States and China also contributed to the ranking changes.
Well-known digital-focused technology firms, such as Kakao, also experienced challenging years. Amid the saturation of the South Korean market and stricter regulatory rules in South Korea, Kakao could merely record a meager 2% growth, descending from the 10th spot at the end of 2022 to 14th. In 2021, Kakao had secured the fifth place.
Naver managed to maintain its eighth spot, being surpassed by Coupang, a major online retailer listed on the New York Stock Exchange, with a market capitalisation of $28.9 billion.