Seoul: The South Korean central bank said the global semiconductor market remains undersupplied and the current AI-driven supercycle is expected to continue for some time, dismissing investors' concerns that the chip cycle has already peaked.
According to Yonhap News Agency, the Bank of Korea (BOK) highlighted in a report submitted to Rep. Park Sung-hoon that semiconductor demand has surged significantly due to investments in artificial intelligence (AI) infrastructure, while the pace of supply expansion has been slow. The BOK emphasized that the semiconductor cycle has yet to slow.
The BOK indicated that the current chip cycle differs from previous ones due to competitive corporate investment, anticipating fundamental changes to the industrial ecosystem driven by AI. The report noted that supply expansion is constrained, as the market is led by custom products such as high-bandwidth memory (HBM). The global semiconductor market is expected to continue its expansionary trend for a considerable period.
The report emerges amid concerns over debt-funded AI infrastructure spending, elevated market valuations, and the potential for a memory chip oversupply, which have triggered selloffs in major technology stocks. In South Korea, chipmakers Samsung Electronics Co. and SK hynix Inc. have experienced sharp declines recently. Samsung Electronics fell more than 9 percent on July 2, while SK hynix dropped nearly 15 percent. Last Tuesday, Samsung Electronics shares fell 7 percent and SK hynix lost 6 percent, despite Samsung reporting a significant second-quarter operating profit that beat market expectations.
The BOK acknowledged uncertainty surrounding the pace and scope of AI technology adoption and its profitability. Nonetheless, major investment banks such as J.P. Morgan, Goldman Sachs, and Morgan Stanley generally forecast that the global semiconductor market will remain robust at least through next year.