The Real Reason Apple is Considering Chinese Memory... The AI Memory Shortage Has Begun 'Semiconductors Are at Their Cheapest Point Right Now' | CEO Lee Hyung-soo

Summary

Lee Hyung-soo, CEO of HSL Partners, discusses Apple's consideration of Chinese memory as a negotiation tactic and argues the AI memory shortage is real, with Apple lagging in AI. He criticizes Apple's strategy as unlikely to succeed due to US policy and Chinese memory's technical limits. On Korean semiconductors, he dismisses oversupply fears from new fab announcements, noting capex is focused on advanced memory, and sees the recent correction as a prime buying opportunity. He is highly bullish on Samsung Electronics and SK hynix, expecting a structural re-rating and bubble rally, while also pointing to a capex upcycle for equipment makers.

• Apple is considering Chinese memory chips (CXMT) mainly to pressure its existing suppliers, but actual adoption faces major political and technical hurdles.
• Chinese memory is not significantly cheaper due to low yields, and government subsidies prop up production; its performance in servers is uncompetitive outside China.
• Lee argues Apple's AI strategy is behind, and relying on Chinese memory would risk further setbacks as US policy would likely block such moves.
• Korean memory firms face little threat from Chinese competition, and the AI-driven memory shortage is sustaining strong demand for advanced memory.
• New Korean fab announcements (Honam cluster) are unlikely to cause oversupply because capex is directed toward HBM and custom memory, not commodity DRAM, and project timelines are long.
• Lee is extremely bullish on Samsung and SK hynix after the recent correction, citing cheap valuations (Samsung below 6x forward P/E) and a structural shift to specialty memory that warrants higher multiples.
• He forecasts that the memory sector will enter a bubble-phase rally after Q3 uncertainty, making the current period an ideal buying opportunity.
• A capex upcycle in memory front-end equipment and materials is expected to boost the broader semiconductor supply chain, but no specific companies were named.