Shares of SK Hynix (000660.KS), the world's second-largest memory-chip maker and the leading supplier of high-bandwidth memory (HBM, the stacked DRAM that feeds AI accelerators), have dropped 36% from their recent peak over three weeks, according to a July 15 note from KB Securities, the brokerage arm of Korea's KB Financial Group. The stock last closed at ₩1,913,000 ($1,284), the note said. The slide was driven by fears that big-tech customers are about to throttle back AI data-center spending.
For any manager holding the most AI-levered name on the KOSPI — Korea's benchmark index — the question is blunt: is the memory super-cycle rolling over, or is this a sentiment-driven dip? KB Securities' answer is that the fundamentals have not changed. The brokerage argued the memory supply shortage will persist "at least until 2028" and called the sell-off "psychological," saying "excessive worry is instead a buying opportunity" (KB Securities note, July 15). It maintained a "buy" rating and a ₩4,200,000 ($2,819) target price. Those figures are the brokerage's own view, reported here as an observation rather than an endorsement.
The trigger versus the numbers
The fear centers on Meta Platforms. KB Securities framed the pullback worry as "temporary noise," noting that Meta's spending is rising, not falling. Per the note, Meta's 2026 AI investment of about ₩220 trillion ($148 billion) represents roughly 20% of total U.S. big-tech AI spending, and the company plans to add 7 gigawatts of compute this year and another 7GW next year for 14GW total.
External reporting supports the direction. Meta on July 13 confirmed it is expanding its Hyperion data center in Richland Parish, Louisiana, to 5GW with total investment past $50 billion — up from the roughly $10 billion, 2GW campus it first announced in December 2024 (CNBC, July 13, 2026). KB Securities cited the same $10 billion-to-$50 billion-plus trajectory as evidence the AI build-out is accelerating.
KB also pointed to a supply-side squeeze: with next year's capital spending concentrated on HBM, general-purpose memory capacity additions will be "effectively limited," and long-term supply agreements now being signed mean ordinary buyers could face supply "near zero" in 2027. Separately, the note said the U.S. Federal Energy Regulatory Commission's fast-track approval for grid connections could cut hook-up times from more than five years to one or two — removing a bottleneck for data-center power.
Why the debate matters for Korea
The stakes reach beyond one stock. The government's second-half growth strategy, unveiled July 14, leans directly on the chip boom: it raised the 2026 GDP target to 3% — up a full percentage point in six months on stronger-than-expected semiconductor exports — and centers on "three mega-projects," including ₩956 trillion ($642 billion) for memory production capacity and ₩550 trillion ($369 billion) for AI data centers, plus a new "Future Response Fund" seeded by chip-driven tax revenue (Newsis, July 14).
Retail speculation on the same names has grown intense enough to draw a regulatory response. The Korea Financial Investment Association (KOFIA, the securities industry's self-regulatory body) convened the CEOs of 10 major brokerages to draft voluntary rules on single-stock leverage products tied to Samsung Electronics (005930.KS), Korea's largest chipmaker, and SK Hynix, including higher minimum deposits, citing outsized losses from "negative compounding" (Chosunbiz, July 14).
The cyclicality caveat
Memory is a cyclical business, and bulls have been wrong before. In the last major downturn, SK Hynix posted a full-year operating loss of ₩7.73 trillion ($5.2 billion) in 2023 as pandemic-era demand collapsed, before returning to quarterly profit in the fourth quarter of that year as AI-server demand lifted prices (SK Hynix 2023 results, PR Newswire). KB's thesis is that binding long-term contracts make this cycle structurally tighter than 2023's glut — a claim the next data points will test.
The clearest near-term arbiter is SK Hynix's upcoming quarterly earnings and any revision to big-tech capital-spending guidance. If Meta and its peers reaffirm the multi-year build-out and HBM pricing holds, KB's "noise" reading gains weight; a genuine capex guide-down would validate the sellers.
Sources: KB Securities Note via Chosunbiz · Newsis Economy · Chosunbiz Market Data · CNBC Meta AI Capex
This article is journalism, not investment advice. LineVest is not a registered investment adviser. Figures attributed to KB Securities, including its rating and price target, reflect that firm's stated views, not LineVest's. Currency conversions use an approximate rate of 1 USD = 1,490 KRW (July 14, 2026).
