Samsung Electronics and SK Hynix have announced large-scale investment plans.
Morningstar analyst Jing Jie Yu says SK Hynix’s Yongin semiconductor cluster
carries total investment commitments of about 600 trillion won; if the new
commitments are standalone investments, they could imply material oversupply
risk over the next decade, a concern that pushed shares lower intraday. He
retains a view that memory-chip pricing is cyclical over the long run, expects
new capacity will take at least 2–3 years to come online, and that early output
will likely be demand-accretive but later capacity peaks meeting slowing demand
typically lead to oversupply. Yu adds that persistent shortages and large cash
generation are driving a wave of capacity investment, but unless hyperscale
cloud providers’ returns sustain volume and price growth across the cycle, that
expansion is unlikely to be maintained over the next ten years.
