[Edaily Reporter KIM JUNG YOU ] The world’s largest memory semiconductor companies are facing a critical test this week to allay concerns over artificial intelligence (AI) investments. How they respond to a series of earnings announcements and investor questions will not only determine the market’s direction but is also expected to serve as a barometer for the outlook of the AI industry as a whole.

According to Bloomberg on the 27th, starting with SK hynix(000660)on the 28th, SamsungElectronics(005930), Japan’s Kioxia Holdings, and China’s Changxin Memory (CXMT) will announce their earnings in succession this week. The combined market capitalization of these four companies alone exceeds $2 trillion (approximately 2,650.4 trillion won). The market expects all four companies to post remarkable results, with revenue and profits increasing several-fold. This is a result of the semiconductor supply shortage, which is expected to continue for several years.

However, these companies are facing investor wariness at a level higher than ever before. This stems from concerns that rising borrowing costs and massive investment plans will outpace future earnings. In fact, after Oracle invoked a force majeure clause in response to delays at its New Mexico data center, bond spreads (the difference between corporate bond yields and Treasury yields) have widened across the industry.

Furthermore, corporate bond yields have soared as the stock price of CoreWeave, a data center specialist, plummeted. Firmes Grid, in which NVIDIA has invested, has also withdrawn its initial public offering (IPO) plans. Enscale, a potential UK IPO candidate, is also facing pressure on its listing plans after Microsoft (MS) pulled out of a local data center project.

Billy Leung, an investment strategist at Global X Management, told Bloomberg, “Memory is the best real-time indicator of AI demand,” adding, “While these earnings may not put an end to the debate over an AI bubble, they will help confirm whether the current boom is based on actual orders.”

The earnings announcements by Asian semiconductor companies coincide with those of the world’s largest AI investors, including Alphabet, Microsoft, and Amazon. These earnings reports are expected to serve as a test of AI technology companies’ confidence that the massive funds poured into data centers and computing equipment will generate sufficient returns in the future.

For memory investors, the uncertainty in the bond and IPO markets appears to be bringing back memories of past boom-and-bust cycles. This signals growing concern within the industry that the cycle is approaching its peak. In fact, the stock prices of SamsungElectronics and SK hynix have fallen to roughly half their June highs.

Philip Wool, Chief Portfolio Officer at Relient Global Advisors, noted, “We are transitioning from an era of ‘unbridled optimism’ to one of rigorous scrutiny of fundamentals,” adding, “The days of making easy money in this sector are over.”

However, market interpretations of this anxiety are somewhat mixed. Some analysts dismiss the recent sell-off as premature and believe that measures to expand shareholder returns—such as share buybacks and dividends—could serve as catalysts for a rebound in the coming months.

Lee Jong-wook, an analyst at SamsungSecurities, predicted, “There is a possibility that stock prices will rebound in the second quarter of next year and hit new highs.” Additionally, Macquarie analysts stated, “We view this not as an impending supply glut but as a state of structural supply shortage,” and Citigroup analyst Peter Lee also predicted that “the memory supercycle will last for nine years, longer than previously expected.”

The global competition to build computing infrastructure is generating massive profits for SamsungElectronics and SK hynix. The two companies account for approximately 60% of global DRAM sales and more than 80% of high-bandwidth memory (HBM) sales. KB Securities estimates that the two companies will generate a combined operating profit of 1,571 trillion won in 2026–2027, which is double their cumulative profits over the past 26 years.

A significant portion of this projected growth is already reflected in their order backlogs. It is reported that more than 70% of South Korean semiconductor companies’ planned memory production volume for next year is secured under five-year supply contracts, leaving less than 30% available for other customers, such as smartphone and PC manufacturers.

Some analysts suggest that this structure could present an opportunity for China’s Changxin Memory. Changxin Memory is aggressively expanding in the general-purpose DRAM sector to build the expertise needed to compete head-on with SamsungElectronics, SK hynix, and Micron Technology. Bloomberg noted, “One area investors will now be scrutinizing closely is memory companies’ plans to expand production capacity.”

The market also expects Japan’s Kioxia, which operates a production joint venture with SanDisk, to see its operating profit for the September quarter increase more than 20-fold. The key question is whether the company can secure “long-term contracts” that will shield it from the extreme price volatility in the NAND market.

Dave Maza, CEO of Round Hill Investments, said, “If the Big Four can demonstrate that their order backlogs are not merely expectations but have actually been secured through contracts, the debate over whether the memory market has peaked will be postponed by a year.”