Descriptions:
An Asia-focused fund manager makes the case that the AI chip rally is entering a more selective second half, requiring investors to look beyond pure memory plays toward broader components of the AI supply chain. In the first half of 2026, AI enthusiasm lifted the entire memory sector indiscriminately — SK Hynix and Samsung both surged over 150%. The manager argues the second half will reward companies that can sustain profitability as memory capacity expands, pointing to passive component makers and server rack assemblers like Foxconn as increasingly interesting positions, particularly as Vera Rubin rack deliveries ramp in H2.
On the memory cycle itself, the manager identifies a key tension: supply was severely under-invested two years ago, leading to the current supply crunch and surging average selling prices. But CapEx announcements from all major players — including Micron’s Singapore mega-fab — mean capacity will eventually catch up, likely putting downward pressure on pricing by late 2027 or 2028. Leveraged single-stock ETFs, some of the best-selling products globally, are dramatically amplifying volatility in memory names on any piece of new information.
The conversation also covers South Korea’s $307 billion AI data center and memory fab investment plan, which the manager views as a structural broadening of AI demand beyond U.S. hyperscalers. Government buyers are described as “sticky” — once budget is allocated to a vendor, visibility extends for years rather than quarters. For investors watching AI monetization, the core question is whether the Magnificent Seven can demonstrate a return on cloud CapEx before sentiment shifts away from the pick-and-shovel hardware trade in Asia.
📺 Source: Bloomberg Tech · Published July 07, 2026
🏷️ Format: Opinion Editorial
