K-Memory Leaders Head to the U.S. for Semiconductor Supremacy...Directly Refute 'AI Bubble' Claims [Why&Next]

Chey Tae-won: "The Cycle Is Different from the Past"

Hints at Multi-Billion Dollar Investments in US Semiconductors and AI

Jay Y. Lee Also Heads to US for Sales Diplomacy

Industry Sees Continued Demand, but "The Real Test Comes in Three Years"

Chey Tae-won, Chairman of SK Group, directly refuted the notion of a peak in the memory semiconductor market and the idea of an artificial intelligence (AI) bubble while in New York. In the same week, Jay Y. Lee, Chairman of Samsung Electronics, sat down with top executives from major clients such as Apple and OpenAI in Idaho, USA. While some in the market are predicting the end of the boom, the two leaders, who are the suppliers, headed to the United States to secure even more demand.

According to the industry on July 13, Chairman Chey emphasized that the increasing demand for semiconductors will continue for the foreseeable future during a press briefing and interviews with local media after the SK hynix American Depositary Receipts (ADR) listing ceremony held at the Nasdaq in New York on July 10 (local time).

A Boom Lasting Over 40 Months...Chey Tae-won Says 'The Semiconductor Cycle Has Changed'

Chairman Chey explained that, while the unique cycle of the semiconductor industry has not disappeared completely, the current pace of demand growth is greatly outpacing the expansion of supply capacity. He pointed out that it takes considerable time to build fabs and increase wafer production, and that supply cannot easily be ramped up in a short period due to bottlenecks in infrastructure such as power, water, and land.

Some in the securities industry and the broader market have continued to express concerns that the memory boom has reached its peak. The current global semiconductor boom phase has lasted more than 40 months since March 2023, exceeding the average duration of past booms since 2000, which was 29 months.

Chairman Chey Tae-won of SK and CEO Kwak No-jung of SK hynix, along with other officials, are applauding at the opening bell ceremony celebrating the listing of SK hynix American Depositary Receipts (ADR) at the Nasdaq MarketSite located in Times Square, New York, on the 10th (local time). Captured from SK hynix YouTube, Photo by Yonhap News.

Memory companies expect the supply shortage to continue until as late as the 2030s. Kwak No-jung, CEO of SK hynix, stated, "Next year may be the period of greatest supply shortage in the industry's history," and added, "The situation where demand outpaces production capacity could continue into the 2030s." SK Group also hinted at the possibility of expanding investments in U.S. semiconductor manufacturing facilities and AI-related projects.

Jay Y. Lee Directly Targets Buyers...Simultaneous Sales of HBM and Foundry

Samsung Electronics Chairman Jae-Yong Lee arrived at Seoul Gimpo Business Aviation Center (SGBAC) on the 7th to depart for Seattle, USA. Photo by Yonhap News.

While SK is focusing on expanding long-term demand and signaling future investments, Samsung Electronics is accelerating efforts to secure demand by directly meeting with big tech clients. Chairman Lee departed for the United States on July 7 and attended the Sun Valley Conference in Idaho for the second consecutive year. The event, hosted by Allen & Company, is attended by executives from global IT companies such as Apple, Amazon, and OpenAI. Han Jin-man, President overseeing Samsung Electronics' foundry (semiconductor contract manufacturing) business, was also reportedly in attendance. Chairman Lee's meetings with big tech executives are interpreted as efforts to not only expand memory supply, including high-bandwidth memory (HBM), but also to secure orders for advanced foundry services through proactive sales diplomacy.

It is also reported that Chairman Lee is arranging to meet with Jensen Huang, CEO of Nvidia, in Silicon Valley later this month. If the meeting happens, discussions are expected to include supplying HBM for Nvidia’s next-generation AI accelerators, foundry collaboration, and building AI data centers in Korea. As an integrated device manufacturer (IDM), Samsung Electronics must strengthen both its memory and foundry businesses simultaneously. Currently, Samsung Electronics manufactures Nvidia’s autonomous driving chips and Groq’s language processing units (LPUs) on a contract basis.

Optimism for Continued Boom Dominates, But Some Warn 'The Real Test Comes in 2-3 Years'

The Bank of Korea has analyzed that the semiconductor industry has entered a phase of structural growth, surpassing the short-term cycle. In its work report to the Planning and Finance Committee on July 9, the Bank projected that the global semiconductor market will continue expanding for a considerable period, driven by infrastructure investments related to AI applications (such as agentic and physical AI). However, it identified downward risks such as adjustments in financial markets due to concerns over AI profitability and energy bottlenecks.

Kim Yong-seok, Distinguished Professor at Gachon University’s Semiconductor College, stated, "We are currently in a phase of building out AI infrastructure," and added, "I expect infrastructure investments to continue steadily for the next three to four years."

While there is consensus that the expansion phase will persist, opinions differ on when it will end. Lee Chang-han, former Vice Chairman of the Korea Semiconductor Industry Association, commented, "It is true that the semiconductor market will trend upward in the long term, but current investments are being made too rapidly." He continued, "The AI data center orders currently being placed will all be completed in about two to three years, and once all these facilities are finished, demand could suddenly drop, potentially leading to a significant price crash or a period of stagnation."

This content was produced with the assistance of AI translation services.