The news just broke that SK Hynix and Samsung declined the proposal to repay 18 Billion in upfront costs for power supply in the next 5 years from Korea Electric Power Corp.
What’s alarming is the reason why….
“The companies were unsure if such large upfront payments were necessary, citing uncertainty over the long-term durability of semiconductor demand, a company official in Seoul told Reuters. The official spoke on condition of anonymity due to the sensitivity of the matter.”
This does put some reality into the current market. These high memory prices and massive margins for these companies are temporary. Of course demand will be there and I’m sure everything will continue to grow, but the current supply gap with start narrowing once manufacturing expansions are completed in 2027-28.
When major players are citing concerns with a 5-year plan, it does bring some reality to the hype.
h/t Wallstreetboycott