South Korea’s $590B Chip Bet Has Semiconductor ETFs Buzzing, but Memory Cycles Have Burned Believers Before Quick Read – SK Hynix and Samsung control roughly 90% of global HBM supply, giving EWY and FLKR outsized exposure to AI’s most critical memory bottleneck. – DRAM surged…
6% since April but plunged 16% in five days after Michael Burry shorted AI names, then rebounded 8% on Anthropic-Samsung chip talks. – South Korea’s $576B chip plan could double DRAM wafer capacity but does nothing to relieve the near-term HBM shortage strangling AI development. – While a justifiable amount of A.I. attention has been devoted to faster and more powerful semiconductor processing chips, the High Bandwidth Memory (HBM) part of the equation is less sexy, but no less important. Without HBM, A.I. has insufficient memory to operate properly — and this has been one of the major bottlenecks to A.I. development
Although Micron Technology (NASDAQ: MU) is the leading US player in memory chips, its global HBM share is only around 10%. The majority of the HBM arena is solidly in Korean hands: SK Hynix’s market share is estimated at close to 60%, and Samsung has roughly 30%. The dearth of HBM supply is a primary reason why ETFs holding large allocations of Micron, Samsung, and SK Hynix have done so well in the past year.
This is why a recent announcement from the South Korean government, reported in the Korea Economic Daily, has the industry excited, but wary: President Lee Jae Myung unveiled a sweeping AI and semiconductor push worth more than $576 billion over several years, aimed at cementing Korea’s leadership in memory and AI. At its core, Samsung and SK Hynix committed roughly 800 trillion won (about $518 billion), together with suppliers, to build new chip fabrication sites in the country’s southwest. Roundhill Memory ETF (CBOE: DRAM) is the only pure-play ETF to watch for the near- and long-term impact of this announcement from an industry purview.