Singapore sovereign wealth fund Temasek is reportedly mulling a direct investment in Samsung Electronics and SK Hynix, sparking a sharp rally across South Korean chip stocks on Wednesday.
Asian chipmaking shares surged on Wednesday following reports that Singapore’s sovereign wealth vehicle was exploring direct capital deployment into the world’s two largest memory chip makers (Samsung Electronics Co Ltd and SK Hynix Inc). The development offered a powerful boost to South Korean chipmakers as market risk appetite returned following a brutal sell-off in July.
Shares of both memory giants briefly extended gains to more than 8 per cent after businesstimes.com.sg that the Singapore investment company planned to invest directly through its internal investment team and was currently evaluating timing. Samsung ultimately closed the session up 6.7 per cent, while SK Hynix finished up 4.7 per cent. The broader benchmark Kospi index climbed 3.7 per cent.
Temasek Responds to Government Consultation Claims
Reports from local media suggested that the Singaporean fund had contacted the South Korean government regarding the timing of the planned deployment. However, a Temasek spokesperson disputed that characterization in statements to international financial outlets.
According to a report by the South Korean outlet Asia Business Daily, which cited government ministries and agencies, Temasek contacted the Korean government over the timing of the investment.
Countering the local report, Temasek stated that it did not seek advice from Seoul concerning the timing of investments in either company. The fund noted that its initial financial stake in both South Korean memory makers began more than two years ago. With a net portfolio valued at S$518 billion ($404.5 billion), Temasek counts among the largest sovereign investment vehicles globally, with a historical Korean portfolio that includes stakes in Hyundai Motor, Celltrion, and POSCO Holdings.
Valuations, Shareholder Returns, and Market Rebound
The reported institutional interest arrives on the heels of a sharp market correction in July. During that month, mounting doubts over the rapid pace of artificial intelligence infrastructure build-out triggered heavy liquidations and an unwinding of leveraged positions across the sector. Despite that volatility, both memory producers remain up more than 100 per cent overall for 2026, fueled by windfall demand from artificial intelligence applications.
Lee Homin, a senior macro strategist at Lombard Odier Singapore, observed that the development hints at long-term investors’ improving appetite for South Korea’s deeply-undervalued semiconductor sector
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Valuations for the two firms retreated to notable lows following the summer sell-off. Samsung and SK Hynix trade at forward earnings multiples of 4.2 and 3.6, respectively, contrasting sharply with a multiple exceeding 21 for the Philadelphia Semiconductor Index. Adding to the bullish momentum, SK Hynix announced on August 7 that it will unveil specific shareholder return details in the third quarter, while KB Securities analysts anticipate a more than tenfold increase in shareholder distributions from Samsung Electronics.
Broader Asian Chip Rally and Foreign Capital Flows
The positive sentiment rippled well beyond the Korean peninsula, aided by strong Wall Street earnings reports from CoreWeave and Super Micro.
Across regional exchanges, Japanese suppliers such as Advantest, Kioxia Holdings, and Murata Manufacturing rose between 0.8 per cent and 3.5 per cent. In greater China, Semiconductor Manufacturing International Corporation added 4 per cent, and TSMC rose 0.8 per cent in Taipei trade.
Global institutional funds demonstrated clear accumulation during the recovery window, injecting more than 2 trillion won (approximately US$1.4 billion to S$1.8 billion) into Kospi shares through mid-August while domestic retail traders took profits. Analysts suggest that confirmation of a major sovereign backing would provide structural validation for the country’s memory cycle moving forward.
“If confirmed, the investment would signal “strong foreign confidence in Korea’s AI/memory cycle””
Ha SeokKeun, chief investment officer at Eugene Asset Management
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