This Asian Country Is 1% The Size Of The US — And It Just Delivered 11x The S&P 500's Returns

The iShares MSCI South Korea ETF (EWY) has surged 112% year-to-date, outpacing the S&P 500 by a factor of 11. The rally is fueled by AI chip manufacturing dominance, with SK Hynix and Samsung together commanding nearly 46% of the ETF's weighting.

Both companies have captured critical market share in high-bandwidth memory (HBM) production, a specialized chip component essential for AI accelerators. This semiconductor segment has become a chokepoint in the global AI infrastructure build-out, positioning South Korean manufacturers as primary suppliers to hyperscalers and AI hardware developers.

Despite the dramatic year-to-date gain, SK Hynix and Samsung continue to trade at relatively low valuations. The companies maintain substantial growth pipelines tied to expanding HBM capacity and next-generation memory architecture, suggesting potential for further re-rating as AI infrastructure spending accelerates.

The concentrated exposure to two stocks driving nearly half the ETF's performance creates both opportunity and risk, amplifying volatility in either direction based on semiconductor demand trends.