Hong Kong Stock Concept Tracking | Chip giant Samsung Storage accelerates production expansion and next year may be the year where storage is out of stock (with concept stocks)

The Zhitong Finance App learned that, according to reports, memory chip giant Samsung Electronics plans to advance the commissioning of Yongin's first wafer factory to 2029, 1-2 years earlier than originally planned. Early production will help Samsung Electronics respond more quickly to the surging global market demand for AI chips. Earlier, Samsung revealed investment plans to invest a total of 2030 trillion won (about 1.35 trillion US dollars) in the two major semiconductor industry clusters of Pyeongtaek and Yongin, and 400 trillion won to build two new chip factories in Gwangju, 270 kilometers south of Seoul.

On Friday, SK Hynix officially listed on NASDAQ in the form of ADR. It closed up 12.76% on the first day and closed at $168.01. At one point, it rose nearly 19% during the intraday period, and its market capitalization reached 1.22 trillion US dollars. SK Hynix disclosed in the US stock prospectus that the capital raised will be used to expand production capacity and purchase extreme ultraviolet lithography (EUV) equipment. The company invested 4 billion US dollars to build an advanced packaging plant in Indiana and plans to build a fab cluster at a cost of about 390 billion US dollars in Yongin, South Korea. In addition, SK Hynix and Samsung Electronics will also participate in a national semiconductor industry investment plan led by the South Korean government with a total scale of at least 880 billion US dollars.

Guo Luzheng, CEO of SK Hynix, said on July 10 that the global memory chip industry is moving towards the worst supply shortage in history. 2027 is expected to be the industry's most tight supply year, and the shortage will continue beyond 2030. Customers are signing long-term contracts because they believe the shortage will last longer.

On July 9, memory chip giant Micron Technology announced that the company plans to invest more than 250 billion US dollars in the US by 2035. The new investment plan is a further increase from the $200 billion announced in June last year, and the latter itself is already an increase of 30 billion US dollars over Micron's initial investment plan. Micron expects that this increase in investment will help it achieve its long-term goal of producing 40% of DRAM chips in the US.

Guojin Securities said that global memory chip supply and demand continue to be unbalanced. Leading companies such as Samsung, SK Hynix, and Micron are strongly willing to expand production, and capital expenditure has jumped sharply. Storage giants' plans to expand production are constrained by equipment supply bottlenecks, and they are urgently seeking diversified equipment suppliers to ensure production capacity implementation.

However, after experiencing a round of strong gains, the rise in chip stocks has cooled down in recent weeks, in part because investors are concerned that the growth rate of AI spending may slow down. Additionally, there are reports that Apple is seeking to diversify part of its semiconductor supply chain to Chinese suppliers, and Meta is seeking to commercialize excess AI computing power, leading to heightened market concerns. The stock price of SK Hynix's common stock listed in Seoul, South Korea has fallen by about 25% from its all-time high set two weeks ago.

Matt Kennedy, senior strategist at Renaissance Capital, said, “Investors will weigh the relationship between the strong performance accumulated by the sharp rise in stock prices over the past year and recent market fluctuations. “Oversupply concerns have always been a risk inherent in the semiconductor industry.”

Michael Wilson, chief US stock strategist at Morgan Stanley, issued a heavy warning that the upward momentum of chip stocks is “clearly weakening.” The analyst believes that capital is shifting from “shovels sellers” to “gold diggers”: semiconductor (core stock) manufacturers (sellers) whose valuations have soared in the early stages are already extremely crowded, and hyperscale data center operators (gold diggers) — such as Microsoft, Amazon, and Meta Platforms — that can actually benefit from AI in the medium to long term — have a more unique appeal in the AI ecosystem with strong cloud business and cash flow, and are becoming a new target for capital.

Related concept stocks:

SMIC (00981): SMIC's core products cover many fields, including logic chips, memory chips, and analog chips. Sales revenue for the first quarter was US$2,505.5 million, up 11.5% year on year; net profit was about US$197 million, up 5% year on year. In the second quarter, the company's revenue guidance was a month-on-month increase of 14% to 16%, and the gross margin guide was 20%-22%.

Huahong Hongli (01347): Huahong's storage business is divided into two main lines: embedded non-volatile storage eVM (basic disk, highest revenue share) and independent NOR Flash (second curve of high growth). Sales revenue for the first quarter reached US$660.9 million, up 22.2% year on year; net profit of US$20.9 million, up 458.1% year on year and 19.9% month on month.

GigaYi Innovation (03986): GigaYi Innovation is the leading NOR flash design company in China, with the second largest market share in the world. The company actively lays out a diverse product matrix, covering NOR Flash, SLC NAND Flash, niche DRAM, MCU, analog chips and sensor chips. Zhongyuan Securities believes that the company is a leading domestic niche memory and MCU company. The memory cycle continues to rise. The average volume and price of the company's niche DRAM, SLCNAND, and NorFlash products have risen sharply. The company actively lays out customized storage, is expanding smoothly with customers in various fields, and is expected to contribute revenue in 2026.

ASMPT (00522): ASMPT announced that it has received an additional order from a leading global integrated device manufacturer (IDM) to supply eight thermocompression bonding (TCB) devices for its chip-to-wafer (C2W) applications. As the demand for performance and integration increases in the era of heterogeneous computing, architectures based on small chips (chiplets) are becoming increasingly popular. These devices will support the IDM to produce advanced client and data center CPUs.