[Edaily Reporter Kim Kyung-eun ] Although domestic semiconductor stocks have undergone a sharp correction amid concerns over the sustainability of artificial intelligence (AI) investments and geopolitical risks in the Middle East, analysts say the industry’s structural growth trend remains intact. Given the ongoing rise in memory prices and supply shortages, the recent stock price decline is viewed as short-term volatility driven by a contraction in investor sentiment rather than a deterioration in fundamentals.

Kim Dong-won, Head of Research at KB Securities, stated in a report on the 27th, “Even though stock prices have fluctuated, the growth trend remains unchanged.” He identified the following as top picks in the semiconductor sector: SamsungElectronics(005930), SK hynix(000660), SamsungElectroMechanics(009150), and LG Innotek(011070).

Over the past month, SamsungElectronics’ stock price fell 33%, SK hynix’s dropped 41%, SamsungElectroMechanics’ declined 45%, and LG Innotek’s plummeted 65%. Analysts attribute this to a sharp contraction in investor sentiment caused by a combination of doubts regarding the sustainability of AI investments and geopolitical uncertainty in the Middle East.

However, Director Kim emphasized that stock price trends and industry fundamentals must be viewed separately. He predicted that memory semiconductor prices would rise by at least 30% in the third quarter of this year and that the memory supply shortage would intensify through 2028. He also anticipated that the supply shortage for AI substrates would worsen as the second half of the year progresses.

In particular, he forecast that 2027 will mark the tightest supply situation in the history of the semiconductor industry.

This is because, starting next year, U.S. Big Tech companies are expected to begin significantly expanding their long-term supply agreements (LTAs), and new memory production volumes will be allocated to them first. Consequently, he projected that the volume supplied to smartphone and PC manufacturers would decrease significantly.

Furthermore, the share of High-Bandwidth Memory (HBM) in global DRAM wafer production capacity is expected to expand from 15% this year to 34% next year. As a significant portion of new DRAM production capacity is concentrated on HBM, the increase in general-purpose DRAM supply will be limited. The report predicted that memory shortages in the business-to-consumer (B2C) sector—including smartphones, PCs, and consumer electronics—will intensify further.

The report also projected that the trend of expanding AI investment will continue.

Director Kim stated, “U.S. Big Tech companies such as Google, Amazon, Microsoft, and Meta share the view that the risk of underinvestment is greater than that of overinvestment when it comes to securing leadership in the AI market,” adding, “AI infrastructure will serve as the digital rails connecting future industries.”

He went on to emphasize, “Even assuming AI investment reaches $800 billion this year, the share of investment relative to U.S. gross domestic product (GDP) is only about 2.5 percent,” adding, “Compared to the 5–7 percent range where bubbles formed during past technological revolutions, we are still in the early stages.”