South Korea's benchmark Kospi index has surged about 80% this year to record highs, yet its valuation has fallen to a historic low as corporate earnings, led by memory-chip giants Samsung Electronics and SK Hynix, have outpaced the rally. Investors remain divided over whether the cheap valuations present a buying opportunity or reflect concerns over the sustainability of the AI-driven memory boom.

Demand for SK Hynix and Samsung’s chips has set the sharemarket alight, fired up consumers and made South Korea one of the world’s fastest-growing economies.

South Korea's benchmark Kospi index has surged about 80% this year to record highs, yet its valuation has fallen to a historic low as corporate earnings, led by memory-chip giants…