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Morningstar: SK Hynix, Samsung Investment Plans May Pose Oversupply Risk
2026-06-29 14:36:38 Samsung Electronics and SK Hynix announced large-scale investment plans. Morningstar equity analyst Jing Jie Yu stated that the total investment commitment for SK Hynix's Yongin Semiconductor Cluster was estimated to have reached approximately KRW600 trillion. If the new commitments represent standalone investments, this could imply significant oversupply risks over the next decade, the analyst said, adding the uncertainty weighed on share prices today (29th). He noted that the long-term outlook for memory pricing remains cyclical. New capacity was expected to take at least two to three years before commencing production, with demand likely to exceed supply in the initial stage. However, oversupply typically emerges later when peak capacity coincides with a slowdown in demand. He believed that the intensifying shortage of memory chips, coupled with long-term agreements and substantial cash generation by memory makers, is driving a wave of capacity investments. Unless hyperscale cloud service providers can sustain returns on investment in line with continued sales and price growth throughout the period, this trend will be difficult to maintain over the next decade. ~ AASTOCKS Financial News Website: www.aastocks.com | |