J.P. Morgan Asset Management believes Korea needs to turn a semiconductor-driven stock market rise into a broader rally in order to attract foreign capital beyond the memory chip cycle. Alexander Treves, the company’s managing director and head of investment specialists for emerging markets and Asia-Pacific equities, said this in an interview with The Korea Herald.
According to him, a broader increase in earnings among technology companies outside the memory segment, as well as industrial, financial and consumer-sector businesses, would support a more sustainable inflow of foreign funds. Treves also said that increasing trading volumes in the market was important.
Risk of dependence on chipmakers
In the short term, the Korean market should, in Treves’s view, rely less on Samsung Electronics, SK hynix and other major technology companies. When index returns are driven by a narrow group of large-cap corporations, global active asset managers face concentration restrictions and risk limits, he explained.
The dominance of the semiconductor industry also creates cyclical risk for the entire market because of its dependence on fluctuations in the global chip production cycle. The prospects for Samsung Electronics and SK hynix, according to Treves, are linked to the sustainability of the artificial intelligence investment boom, capital expenditure by major cloud operators and data centers, supply discipline and memory prices.
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Sectors for broader growth
Treves named the defense industry, shipbuilding and biotechnology among the potential drivers of a broader rally, supported by export demand and favorable domestic conditions. In his view, financial companies could benefit from Korea’s Value-Up program, share buybacks, higher dividends and relatively low valuations. Energy and electrical infrastructure companies, he said, could benefit from the development of AI and data centers.
The expert also noted K-beauty companies, department stores and luxury consumer businesses, which, he said, are supported by rising domestic wealth and growing inbound tourism. To reduce the so-called Korea discount, better board oversight, transparency, accountability and more disciplined capital allocation are needed, Treves said.
The Value-Up initiative can become a factor in market revaluation only if it produces measurable results, including completed share buybacks, the cancellation of treasury shares and sustained dividend growth. Treves is due to deliver an international keynote address at the HIT Forum on September 8, 2026, in Seoul.
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