South Korea's finance minister sees chip market staying solid through 2027

Finance Minister Lee Hyoung-Il said semiconductor growth can last at least through 2027, even as chip stocks fell sharply in the past week. The view follows a year of record profits, surging exports and volatile trading in AI-linked hardware.

What happened

South Korean Finance Minister Lee Hyoung-Il said semiconductor growth can be sustained at least through 2027. He spoke to CNBC on the sidelines of the IMF-World Bank meetings in Bangkok. His reasoning was that demand still far exceeds supply even as capacity expands [1].

Lee described the South Korean economy as solid. He also said the chip boom should lift tax collections above projections [1].

His upbeat official view comes against a sharp weekly decline in chip stocks, including SK Hynix, Seoul Semiconductor and Nvidia. Some domestic commentary also warns of a memory-market glut by 2029 [1].

How we got here

The minister's comments follow a year in which memory makers moved to the centre of the AI trade. On January 29, 2026, SK Hynix reported record full-year 2025 operating profit of 47.2 trillion won. That topped Samsung Electronics' 43.6 trillion won and was the first time SK Hynix had led its rival in annual operating profit. The shift was attributed largely to its leadership in high-bandwidth memory (HBM) used in AI processors and servers [2].

Doubts about AI appeared early. On February 2, European stocks were expected to open sharply lower amid global risk-off sentiment. Reports that Nvidia's planned $100 billion OpenAI investment had stalled renewed doubts about the AI boom [3]. By February 26, Japan's Nikkei 225 had risen 1.1% to a record 59,199.31 on tech-powered gains on Wall Street. Samsung Electronics and SK Hynix gained 1.97% and 2.26% [4].

On June 5, Nvidia CEO Jensen Huang's four-day visit to South Korea drew intense public attention. Local chip stocks fell that day, tracking U.S. semiconductor weakness after Broadcom's downbeat earnings [5].

July brought sharp swings. SK Hynix had its biggest-ever one-day decline on a Monday, amid profit-taking and AI spending worries. It then jumped over 11% in Seoul on July 15 [6]. On July 16 it dropped over 9%, reversing a prior 8% rally. Traders cited crowded positioning and elevated index concentration, despite strong ASML guidance lifting full-year sales to 43–45 billion euros [7].

By mid-August, SK Hynix was investing $720 billion in what it calls the largest network of memory factories in the world. It argued that AI-driven HBM demand is structural rather than cyclical. It held 58% of the HBM market in the first quarter, and its U.S.-listed shares had fallen about 21% from a July peak [8]. In the same period, investor Steve Eisman warned that AI revenue is concentrated in OpenAI and Anthropic. Michael Burry disclosed bearish positions in Nvidia and the broader semiconductor sector [9].

Hard data stayed strong. South Korea's August goods exports reached a record $98.25 billion. Semiconductor exports rose 209% year-over-year to $46.65 billion, nearly half of the total. Analysts warned that an abrupt chip slowdown, while the Bank of Korea was still tightening and traditional sectors struggled, could leave domestic demand unable to offset it [10]. On September 30, Micron beat expectations on fiscal Q4 adjusted EPS ($33.42 vs $31.61) and revenue ($54.23B vs $51.07B). It guided fiscal Q1 to about $61.5B in revenue and $38.15 in adjusted EPS, and said it is investing $250B in HBM capacity [11].

What changed is the official framing. Through the year, the discussion of the chip cycle came from companies, traders and analysts. Now the finance minister has put a government view on record that demand should keep outrunning supply through 2027, just as chip shares fell sharply over the week [1].

Why it matters for markets

South Korea's exposure to chips is large, so the minister's view bears on both public finances and equities. Because semiconductors were nearly half of August exports, a continued boom could support export figures and, as Lee suggested, tax revenue above projections [10][1]. If demand does keep outrunning supply, it would be consistent with the long-term supply deals and capacity buildouts that SK Hynix and Micron have described [8][11].

The recent trading pattern shows that fundamentals and share prices have not moved together. SK Hynix's July swings and the latest weekly decline came despite strong earnings, record exports and upbeat guidance [7][1][10][11]. A forecast of solid demand through 2027 could therefore coexist with further volatility. The concerns raised by Eisman, Burry and domestic commentators about customer concentration, end-demand and a possible glut by 2029 are a separate channel. They would matter if spending by large cloud buyers slowed [9][1].

Rates and currencies may also play a role, though no direct link to the latest chip decline has been reported. The U.S. 10-year Treasury yield was 5.1% on October 15, versus 4.94% on September 17, and the 2-year yield was 4.77%, versus 4.67% [12][13]. Higher yields could weigh on richly valued growth stocks [13]. The yen was at 158.34 per dollar on October 9, versus 153.71 on September 11 [14]. The impact on Korean chipmakers is not yet known.

What to watch

• Official data on exports. Whether South Korea's semiconductor exports keep growing at the pace seen in August, when they rose 209% year-over-year, and whether tax collections come in above projections as Lee expects [10][1].
• Capacity versus demand. Lee's view depends on demand exceeding supply while capacity expands. SK Hynix's $720 billion buildout, the push by President Lee Jae Myung to double national memory production in five years, and Micron's $250B HBM investment all add supply over time [8][11].
• Competition in HBM. Analysts expect intensifying HBM4 competition from Samsung and progress from Micron, which could affect SK Hynix's 58% first-quarter share [2][8].
• AI customer concentration. Further signs of how dependent cloud revenue is on OpenAI and Anthropic, and of price pressure from Chinese open-source models [9].
• Bank of Korea policy. Analysts have flagged that the central bank was still tightening when exports surged. Its next steps would affect how well domestic demand can absorb a chip slowdown [10].
• Trading volatility. Whether the latest weekly decline in SK Hynix, Seoul Semiconductor and Nvidia extends, given earlier warnings about crowded positioning and index concentration [1][7].

Sources

1. US Top News and Analysis: Semiconductor market to remain solid ‘at least through next year,’ South Korea finance minister says, 17 Oct 2026
2. US Top News and Analysis: SK Hynix overtakes Samsung in annual profit for the first time as AI reshapes rivalry, 29 Jan 2026
3. US Top News and Analysis: European stocks set for sharp declines as global market fears are reignited, 02 Feb 2026
4. US Top News and Analysis: Japan's Nikkei 225 hits another high as Asia markets track Wall Street's tech-powered rally, 26 Feb 2026
5. US Top News and Analysis: Tracking website, food watch: South Korea is obsessing over Nvidia CEO Jensen Huang's visit, 05 Jun 2026
6. US Top News and Analysis: SK Hynix South Korean shares jump 11% as Asia tech stocks rally, 15 Jul 2026
7. US Top News and Analysis: SK Hynix shares plunge 9% as Asia sees tech rout, tracking U.S. chip losses, 16 Jul 2026
8. US Top News and Analysis: An inside look at SK Hynix $720 billion AI-fueled buildout that's taking over South Korea, 13 Aug 2026
9. US Top News and Analysis: 'Big Short' investor Steve Eisman sees an Achilles heel in the AI boom, 13 Aug 2026
10. US Top News and Analysis: South Korea's semiconductor exports just tripled year-over-year. Is it too much of a good thing?, 03 Sep 2026
11. US Top News and Analysis: Micron beats on earnings and issues strong guidance as data center revenue jumps 11-fold, 30 Sep 2026
12. Federal Reserve H.15: US 2-year Treasury yield (H.15), 15 Oct 2026
13. Federal Reserve H.15: US 10-year Treasury yield (H.15), 15 Oct 2026
14. FRED (Federal Reserve Bank of St. Louis): Japanese yen per US dollar (FRED DEXJPUS), 09 Oct 2026

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• Author: FinUties Research
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• Earlier related events cited from 2026-01-29

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