The AI Chip Bubble: Why South Korea & Taiwan Are In the Danger Zone

Summary

Michael Fritzell warns of an AI-driven memory chip bubble in South Korea and Taiwan, citing unsustainable profit estimates and looming Chinese supply. He highlights value opportunities in Korean small caps, Japanese SaaS, and Southeast Asian stocks. Nintendo is discussed as a potential turnaround play after a sharp selloff.

• Memory chip stocks in Korea and Taiwan are in bubble territory due to unrealistic profit expectations and Chinese supply response from 2027.
• Chinese competitors are scaling up memory production, threatening the cycle similar to solar and EV oversupply.
• Korean small caps offer single-digit PE ratios across consumer, industrial, and software sectors with insider buying tailwinds.
• Nice Information Service is highlighted as a cheap credit score monopoly with stable growth and a dividend yield.
• Japanese SaaS companies trade at 2-3 times sales despite 20%+ growth and 20-30% margin targets.
• Tua Paint in Thailand and Fairfax India are examples of cheap value plays in Southeast Asia.
• Nintendo's stock is down 50% due to memory costs and a weak game slate, but a strong 2027 pipeline suggests a recovery.
• Michael Fritzell recommends exploring Asian equities via Interactive Brokers for long-term value investors.