[New York = E-Daily Seong Joowon Correspondent] SamsungElectronics and SK hynix posted record-breaking combined operating profits of approximately 150 trillion won ($104 billion) in the second quarter, driven by demand for artificial intelligence (AI) memory, but the views of overseas experts are divided between optimism and skepticism. While some argue, based on multi-year supply contracts, that “the memory market has truly entered a supercycle,” others are voicing caution, warning that “aggressive capacity expansion could ultimately lead to another supply glut.”
According to Bloomberg on the 30th (local time), SamsungElectronics(005930)and SK hynix(000660)—which together account for 80% of the global memory market—generated 150 trillion won in operating profit in the second quarter alone. SK hynix is projected to post earnings this year alone that exceed its cumulative profits over the past 27 years. Its profit margin has surpassed that of Taiwan’s TSMC, the world’s leading foundry.
However, despite these “surprise results,” the stock prices of both companies have plummeted over the past three days—SK hynix by 30% and SamsungElectronics by 19%.

“Shortage vs. Surplus”… Conflicting Expert Views

The key question on investors’ minds is not simply quarterly earnings, but whether “the AI-driven capital expenditure (Capex) boom is sustainable.” Josh Gilbert, Chief Analyst for Asia-Pacific and the Middle East at eToro, told Bloomberg, “Although Samsung exceeded market expectations, skepticism may persist,” adding, “Investors are asking whether aggressive capacity expansion beyond the current supply shortage will ultimately lead to another cycle of oversupply.”
SamsungElectronics, SK hynix, and their U.S. competitor Micron, however, hold the exact opposite view. SamsungElectronics forecasts that the memory shortage will persist through 2028, while SK hynix’s CEO has projected that it will last until after 2030. In line with this, SK hynix plans to increase its capital expenditure this year by 50% year-over-year to 45 trillion won ($31 billion), and SamsungElectronics is also expected to invest more than the 52.7 trillion won it spent last year.
Adil Ibrahim, Head of Equities at Klay Group, noted, “While some hyperscalers may adjust their capital expenditure plans to some extent, they are not cutting their computing spending itself.” In fact, Meta Platforms raised its minimum capital expenditure target for this year to $130 billion (approximately 184.86 trillion won) this week. Regarding the threat of competition from China, Ibrahim assessed, “Large-scale mass production of advanced DRAM, such as High-Bandwidth Memory (HBM), remains an extremely difficult challenge, and significant barriers to entry exist.”

The Key Lies in ‘Multi-Year Contracts’… “Is This a Real Supercycle?”

Another variable drawing attention from experts is long-term supply contracts. SamsungElectronics has already signed binding contracts with the top five global data center customers for up to five years and is in the final stages of negotiations with the remaining five. According to the company, such contracts could account for 60–70% of its total production capacity. SK hynix has also secured multi-year contracts with about 10 major customers.
Jeremy Tan, CEO of Singapore-based Tiger Fund Management, said, “The ability to command high prices in these contracts is the key to maintaining valuation.” Gilbert of eToro also explained, “The proportion of next year’s production volume locked into multi-year contracts at current prices is what distinguishes a supercycle from an ordinary cycle.”
Jason LeMaire, Chief Investment Officer at Boldwells Partners, assessed SK hynix, saying, “The company is performing well across the board and has significantly increased capital expenditures due to extremely strong demand pressure.” Meanwhile, MS Huang, Research Director at Counterpoint, analyzed SamsungElectronics, noting, “The company is aggressively expanding its market share in most business segments by leveraging its strengths in the memory sector.”
The memory industry has a history of repeated cycles of oversupply and inventory buildup, followed by a rush to expand capacity. Francis Tan, Chief Strategist at Indusuez Wealth, said, “Whether semiconductor manufacturers can maintain pricing power, secure additional long-term contracts, and expand margins will remain a key concern,” adding, “The only thing I want to see is true sustainability.”
The market is keeping a close eye on the next quarter and beyond. Which scenario—the “supply shortage” demonstrated by SamsungElectronics and SK hynix’s earnings, or the “specter of overinvestment” that concerns investors—will materialize is expected to be the key factor determining the future state of the memory market and the stock price trends of the two companies.