Goldman Sachs Sticks with Bullish KOSPI Outlook Amid Semiconductor Shortage

Goldman Sachs has reaffirmed its bullish stance on the KOSPI, despite recent volatility. The investment bank predicts that Korean companies will continue to perform well due to a prolonged shortage of memory semiconductors, driven by increased investment in artificial intelligence data centers.

The supply shortage is expected to intensify next year as global companies, including U.S. big tech firms, raise their capital expenditures from $800 billion to over $1.2 trillion. This will drive computing demand that requires a lot of memory, benefiting the KOSPI companies' performance growth rate.

According to Goldman Sachs, the KOSPI's performance growth rate is expected to be 360% this year and slow to 35% next year. The bank believes that even with slower growth next year, the market has already accounted for it in its expectations.

Goldman Sachs' target of 12,000 points for the KOSPI was calculated using a price-earnings ratio (PER) of 7.5 times 12 months earlier. The bank's strategist, Timothy Mo, stated that this target won't seem 'outrageous' if South Korean companies meet their earnings forecasts.