The KOSPI surged nearly 5 percent shortly after the open on May 11, set another record and finished at an all-time high above the 7,800 mark. Samsung Electronics and SK Hynix both hit record highs, extending a semiconductor-led rally.

The KOSPI closed up 324.24 points, or 4.32 percent, at 7,822.24. It opened up 277.31 points, or 3.70 percent, at 7,775.31 and extended gains. At one point it rose 5.35 percent to 7,899.32, nearing 7,900.

The Korea Exchange triggered a buy sidecar at 9:29 a.m. after KOSPI200 futures rose 5.10 percent from the previous session to 1,210.54, temporarily halting program buy orders.

Individuals and institutions drove the index higher. Individuals were net buyers of 2.8712 trillion won and institutions bought 623.8 billion won, while foreigners sold 3.4881 trillion won net.

A direct backdrop for the rally was a sharp rise in U.S. semiconductor stocks over the weekend.

In New York, Micron jumped 15.5 percent, SanDisk rose 16.6 percent and Intel surged 14.0 percent. The Philadelphia Semiconductor Index gained 5.5 percent. Investor sentiment was seen boosted by Micron's mass production of PCIe 6.0 SSDs for AI data centres and expectations for Intel's foundry cooperation with Apple.

In South Korea, buying spread to large semiconductor stocks and related group shares. Samsung Electronics rose 6.33 percent to 285,500 won and SK Hynix jumped 11.51 percent to 1.88 million won, leading the market.

SK Square rose 8.11 percent, Samsung C&T gained 6.98 percent, Hyundai Motor climbed 5.38 percent, Kia added 6.20 percent and HD Hyundai Heavy Industries ended up 4.10 percent.

LG Energy Solution fell 1.78 percent and Doosan Enerbility dropped 1.23 percent.

Export data also supported semiconductor strength. Exports in May 1 to 10 rose 43.7 percent from a year earlier to $18.434 billion, the highest for the period in May, the Korea Customs Service said. Semiconductor exports soared 149.8 percent to $8.539 billion, accounting for 46.3 percent of total exports.

The market mood is putting more weight on the possibility of sustained demand from expanded AI investment than on concerns about a peak-out in the memory cycle.

Lee Jae-won (이재원), an analyst at Yuanta Securities, said the recent driver of stock market gains has been large semiconductor stocks centred on Samsung Electronics and SK Hynix. He said the current highly concentrated semiconductor market is a process of revaluing the value of memory semiconductors within the AI trend.

The KOSDAQ closed down 0.38 points, or 0.03 percent, at 1,207.34.

In Seoul's foreign exchange market, the won ended at 1,471.60 per dollar, down 7.60 won from the previous session.