South Korean chipmakers Samsung Electronics and SK Hynix saw their shares climb sharply on Monday, extending a rebound that began late last week. The rally was fueled by renewed appetite for semiconductor stocks after a strong session on Wall Street, where the Philadelphia Semiconductor Index jumped 2.78% on Friday.
By mid-morning in Seoul, Samsung was up 4.21%, while SK Hynix gained 1%. The broader KOSPI index rose 1.55% to 7,000.88, reclaiming the 7,000 level intraday for the first time in eight sessions. The move reflects growing investor conviction that the memory chip market is entering a period of sustained tightness, driven by surging demand from artificial intelligence infrastructure.
Memory becomes the new AI bottleneck
As AI spending expands beyond graphics processing units, the supply constraint is shifting toward memory, networking, storage, and power, according to Kim Dong-won, head of research at KB Securities. Speaking to Maeil Business Newspaper, Kim noted that while AI investment boosts memory demand, supply elasticity is shrinking, and the supply-demand balance could tighten further by 2027.
The dynamics are particularly acute for high-bandwidth memory (HBM), which requires substantial advanced DRAM capacity. Aggressive production for AI accelerators can therefore restrict output of conventional DRAM, tightening supply across servers and PCs simultaneously. Analysts also pointed out that major memory manufacturers are currently meeting only about 60% of customer demand, while inventories have fallen sharply.
The bullish case for memory stocks is no longer just about strong AI spending; it is that memory scarcity could persist longer than previously expected. This view has been echoed in recent market commentary, including Intel's warning that the memory crunch may deepen.
Samsung narrows the HBM gap
Samsung's outperformance on Monday also reflects a reassessment of its competitive position in HBM. According to Seoul Economic Daily, Samsung's HBM4 production yield has improved from below 60% during early mass production to around 80%, a level that should support larger-scale shipments. Samsung expects third-quarter HBM4 revenue to more than triple sequentially, with HBM4 accounting for over 60% of second-half HBM revenue.
Counterpoint Research data shows Samsung captured 33% of global HBM revenue in the second quarter, up from 21% in the first. SK Hynix remained the leader at 50%, but its share fell from 58%, narrowing the gap between the two companies to 17 percentage points from 37. This shift has prompted LS Securities to raise its Samsung target to 450,000 won while cutting its SK Hynix target.
Jung Woo-sung, an analyst at LS Securities, told Seoul Economic Daily that the change does not signal a slowdown in HBM market growth. Instead, he described it as "a process of the competitive structure among suppliers normalizing." The improving outlook for Samsung is also reflected in recent chip stock rebounds as investors question AI slowdown fears.
Pricing power has limits
The biggest risk to the rally is that tighter supply pushes memory prices high enough to dampen demand. BNK Investment & Securities recently downgraded Samsung to Hold and cut its target to 270,000 won. It also reduced second-half earnings estimates for SK Hynix, citing slower memory demand, pricing pressure, and a stronger won.
Lee Min-hee, an analyst at BNK, told ChosunBiz that as memory semiconductor prices hit a ceiling, demand elasticity is weakening in servers, following a similar trend in IT products. This creates a clear divide among analysts: KB sees scarcity worsening, LS sees Samsung's competitive position improving, while BNK sees pricing power approaching its limit.
Despite the divergence, Monday's rally underscores the market's focus on AI-driven memory demand. The Kospi's climb on the back of chip stocks highlights the sector's outsized influence on regional markets. Investors will be watching upcoming earnings and memory price trends for further signals.
This article is for informational purposes only and does not constitute financial advice.
