AI Boom Fuels South Korean Pension Fund's Record $4 Billion Quarterly Gain

South Korea's National Pension Service (NPS) has emerged as a major beneficiary of the AI-fueled semiconductor rally, reporting a staggering 189.5 trillion won (approximately $4 billion USD) increase in its stock holdings during the second quarter. This surge pushed the total value of its South Korean listed stocks to 486.01 trillion won, marking a historic quarterly return of 63.9%.

The stellar performance was largely propelled by the strong gains of two memory chip giants: Samsung Electronics and SK Hynix. Together, their valuations contributed nearly 80% of the NPS's overall portfolio increase. Notably, SK Hynix surpassed Samsung Electronics as the single largest source of profit for the NPS this quarter.

SK Hynix saw its valuation skyrocket by 190.3%, from 43.15 trillion won to nearly 125.3 trillion won, despite the NPS maintaining its 7.5% stake. Samsung Electronics experienced a more modest, yet still substantial, 90.1% increase in its holding's value, rising from 76.6 trillion won to 145.8 trillion won, with the NPS slightly increasing its stake to 7.84%.

These two companies now constitute a dominant 55.7% of the NPS's South Korean stock portfolio, a significant jump from approximately 40.4% at the end of the first quarter. Market participants are closely watching the NPS's next moves, as its domestic stock rebalancing measures, temporarily paused to support the market, expired at the end of June. A potential sell-off of South Korean stocks, particularly from these heavily weighted companies, could introduce short-term volatility to the KOSPI.