Research|Korea's AI Investment Plan: Short-to-Medium Term Supply Tightness Cannot be Alleviated

The South Korean government, along with Samsung and SK Group, co-announced an all-time high domestic industry investment commitment totaling 4,800 trillion KRW (USD 3.1 trillion) on the same day.

The primary incremental takeaway from this event is that Samsung and SK Group have pulled forward their respective mega investment projects—originally slated for 2047 and 2045—to 2040 and 2033. However, even with this acceleration, the earliest completion date still falls 7 years from now. This indicates that in the coming years, we are still highly unlikely to see any unplanned capacity expansion.

Although official sources proclaimed a goal of doubling DRAM capacity within 5 years, a 15% CAGR over the next 5 years is far from sufficient to meet the booming demand driven by AI.

Furthermore, Micron raised its CapEx guidance last week, which, overlaid with this Monday's Korea AI Investment Plan, leads us to believe that the former provides a short-term benefit to equipment stocks. At the same time, the latter will boost market sentiment. Among them, Applied Materials, which benefits from HBM capacity expansion, and ASML, which commands the critical EUV technology for advanced nodes, will be the primary beneficiaries.

Details of Korea's AI Investment Plan

Memory