Event Spotlight | U.S.-South Korea Semiconductor Long-Term Agreement Restructured, $750 Billion Directed to SK Hynix

💡 Key Insight

– The total scale of the U.S.-South Korea semiconductor cooperation agreement is approximatelyUSD 9.5 trillion, covering HBM and advanced memory supply, advanced packaging, and AI infrastructure development,At its core, this reflects U.S. AI giants securing supply certainty through long-term contracts with high upfront payments, while simultaneously deepening South Korea’s integration into the U.S. technology and export control framework., representing an overlay of commercial collaboration and institutionalized tech-security frameworks.

– In terms of beneficiaries, $SK hynix (SKHY.US)$bound to major clients including $NVIDIA (NVDA.US)$ secured a $75 billion partnership, making it the biggest winner of this agreement, significantly higher than $Samsung Electronics (005930.KR)$ 's $20 billion; Samsung also benefits from its integrated capabilities in memory, foundry, and packaging, while NVIDIA and Broadcom use this opportunity to lock in upstream supply.

– 💡The strengthening of U.S.-South Korea strategic alignment will further pressure China’s memory industry to accelerate capacity expansion and domestic substitution.—— $CXMT Corporation (688825.SH)$ Combined equipment procurement by Yangtze Memory Technologies and other players is expected to reach RMB 55–63 billion; ⚠️ however, in the short term,China’s window to catch up in high-end HBM will face temporary pressure.。

– ⚠️ Additionally, price wars in optical modules (with 1.6T quotes already as low as $600–800) and concerns over data center power supply remain key industry risks requiring ongoing monitoring.

🔍 Background of the Event

The U.S.-South Korea semiconductor cooperation agreement announced on July 25 is the most emblematic industry-level development recently. The core of the agreement can be broken down into three main components: SK Group’s collaboration with U.S. tech firms including NVIDIA, amounting to approximatelyUSD 750 billion; Samsung Electronics signed an agreement with Broadcom worth approximatelyUSD 200 billiona cooperative agreement; additionally, NVIDIA and SK Group have outlined AI infrastructure cooperation plans exceedingUSD 500 billionin value. The cooperation covers HBM and advanced memory supply, advanced wafer foundry services, advanced packaging, AI data center construction, and joint development of next-generation AI memory. The market has reacted with high sensitivity to this agreement—not only due to its enormous scale, but also because it comes at a critical juncture as the HBM supercycle accelerates upward.

From a strategic perspective, this agreement first signifies demand locking-in: U.S. AI giants are securing long-term, high-prepayment commitments to guarantee supply certainty for HBM, advanced packaging, and high-end foundry capacity—mitigating what could be the biggest supply chain risk over the next several years: 'inability to secure critical components.' Second, it institutionalizes industrial alignment:Korean companies will become more deeply embedded in the U.S. technology and export control framework, subjecting advanced memory manufacturing processes, equipment coordination, and material flows to tighter geopolitical constraints. This goes beyond commercial collaboration—it represents further institutionalization of the tech security architecture.Third, it triggers a reassessment of profit models: when HBM supply shifts primarily to project-based, long-term contract, and co-development frameworks,Profit visibility and sustainability for memory manufacturers will improve significantly, and the long-standing 'cyclical discount' applied by the market is expected to narrow.。

🔍 Analysis of Beneficiary Stocks

Among the beneficiary stocks, $SK hynix (SKHY.US)$is undoubtedly the biggest winner. SK Group’s related cooperation amounts toUSD 750 billion, significantly higher than $Samsung Electronics (005930.KR)$ofUSD 200 billion, and it is tied to NVIDIA, the core customer in today’s AI computing infrastructure supply chain, offering the strongest tailwind effect for HBM suppliers. Although Samsung Electronics benefits slightly less, its strategic importance is no less critical, as it has secured not only high-end memory orders but also engagements in higher-value segments such as 2-nanometer and below foundry services, 2.5D and 3D advanced packaging, and AI chip manufacturing.Its integrated capabilities spanning 'memory plus foundry plus packaging' are poised for re-rating.。

From the perspective of U.S. tech companies, NVIDIA has secured HBM and AI infrastructure support through SK Group, while Broadcom has locked in access to high-end memory, 2-nanometer foundry capacity, and advanced packaging via Samsung—both mitigating upstream supply constraints that could otherwise disrupt revenue realization over the next one to two years. Broadcom deserves particular attention, as its fiscal 2027 revenue guidance for AI semiconductors has already exceededUSD 10 billion, whose future growth is highly dependent on a stable supply of storage and packaging,the marginal impact of this agreement on delivery certainty is significant。

⚠️ Impact and Risks for China's Industry

The deeper the integration between South Korea and the U.S., the more urgent it becomes for China’s memory industry to expand capacity and accelerate domestic substitution.Currently, ChangXin Memory plans to ramp up production by 202650,000 to 60,000 wafers, with equipment procurement needs reachingUSD 5 to 6 billion; Yangtze Memory is also expanding production in parallel, and the combined equipment procurement scale of these two leading firms is expected to reachRMB 55 to 63 billion. This means that regardless of how external alliances evolve,domestic memory capacity expansion has entered the phase of actual order fulfillment, with equipment demand being the first to materialize; moreover, the rising proportion of domestic substitution will allow equipment suppliers to benefit first and most significantly. Yet at the same time,China's window to catch up in high-end HBM will face temporary pressure: Supply chain fragmentation and reinforced technological barriers will further constrain multinational collaboration on advanced memory process equipment, advanced photoresists, high-end silicon wafers, high-performance packaging materials, and associated process know-how. In the short term, this implies longer R&D cycles, more difficult yield ramp-up, and higher capital expenditure intensity;however, over the medium to long term, the logic of domestic substitution will only accelerate as a result。

Additionally, the market is currently discussing the intense price war in optical modules, with 1.6T product quotes already falling as low asUSD 600–800, and meeting minutes indicate domestic quotes have dropped as low asUSD 500, with new entrants (such as Luxshare and Cambridge) severely disrupting the industry landscape through aggressive low-price strategies, potentially pressuring optical chips in the near term. On the memory side, there are concerns that next year’s power infrastructure deployment may lag behind CoWoS production schedules, possibly causing data centers to slow down due to power shortages; we believe there is a contradiction between data center operators’ and hardware giants’ assessments of power availability.The risk, instead, lies in the possibility that data center power demand could become a tool for political maneuvering amid the midterm elections。

Sources: Investing, Zhongtai Securities, Industrial Securities

[Investment Advisory Information]

Yu Shilin, Licensed Representative, Central Entity Number: ATQ882

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