Semiconductor manufacturers recorded extraordinary gains in the first half of 2026, with some chipmakers tripling their share prices as AI datacentre demand overwhelmed global supply chains. Samsung's share price jumped 169% this year, while SK Hynix surged 303% since January.
South Korea's Kospi index climbed 123% in the first half — its strongest performance since at least 1990, according to Guardian analysis of London Stock Exchange Group data. Both Samsung and SK Hynix reported surging demand this year as AI companies competed for chips to power their datacentres.
National Industrial Strategy
On Monday, South Korean president Lee Jae Myung pledged investments worth more than $576bn (£435m) over several years covering semiconductors, AI datacentres and robotics. Under the plan, Samsung and SK Hynix will build four fabrication plants in the country's south-west region. It's a bet on cementing South Korea's industrial leadership in a sector where supply constraints have driven explosive profit growth.
US chipmakers posted even more dramatic gains. Sandisk shares rose 780% in 2026 and rocketed 4,510% over the last 12 months. Western Digital gained 240% this year, Micron climbed 296%, and Seagate rose 226%, with two trading days left until the second half begins.
Dan Coatsworth, head of markets at investment platform AJ Bell, said the four US companies produced "the kind of gains in six months you might normally expect over decades with investing." He added: "Demand exceeding constrained supply led to a surge in memory chip prices and took suppliers' shares on a spectacular ride upwards. Higher selling prices and greater demand is a powerful cocktail for explosive earnings growth."
Price Pressures Hit Consumers
Apple blamed the rise in memory chip costs for iPad and MacBook price increases last week. The company is also reportedly asking the Trump administration for clearance to buy memory chips from CXMT, a Chinese company blacklisted by the Pentagon — a sign that even the world's most valuable tech firm can't escape the supply crunch.
Shares in hyperscalers rolling out AI services fell in recent weeks as investors shifted holdings from software 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, which have led to higher borrowing and will eat up firms' cashflow, making them more capital-intensive businesses.
There've been signs in recent days that the chip stock boom is faltering, with shares off their recent highs as investors rotated out of tech into other sectors. Chris Beauchamp, chief market analyst at trading platform IG, said: "Having piled in to 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."
Broader Market Performance
Stock markets posted solid gains over the first half of 2026. Japan's Nikkei climbed 38%. The UK's FTSE 100 gained 5.8%, having fallen back from a record high at the end of February as the Iran war hit share prices. The London market was lifted by takeover offers for several companies, with Beazley, DCC, Glencore, Schroders, Segro and Intertek receiving approaches from suitors.
Brent crude oil began the year at $60 a barrel and is ending June about $12 higher. However, at the end of April its price had doubled to more than $120 as the closure of the strait of Hormuz fuelled supply shortages. The US S&P 500 share index gained 7.4% so far this year, to 7,354 points at the end of last week.
Mark Haefele, 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. He said: "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."
Why This Matters:
The semiconductor boom reveals both opportunity and risk for European competitiveness. While Asian and American chipmakers capture extraordinary profits from AI infrastructure demand, Europe remains a minor player in advanced chip manufacturing. South Korea's $576bn industrial strategy and the explosive growth of US memory chip firms underscore what targeted national investment can achieve — a lesson for European capitals still debating how to respond to the US Chips Act and Chinese state subsidies. The supply crunch that's driven these gains also exposes Europe's strategic vulnerability: dependence on foreign chipmakers for critical technology infrastructure. Apple's reported approach to the Trump administration for permission to buy from a Pentagon-blacklisted Chinese supplier shows how fragile these supply chains remain, even for the world's most valuable companies.