Semiconductor 'peak out' fears dismissed by industry insiders amid AI boom

Speculation that the semiconductor market is nearing its peak, driven by Meta's potential entry into cloud services, has caused a sharp decline in the stock prices of major memory chip manufacturers like Samsung Electronics, SK Hynix, and Micron.

However, industry insiders and analysts largely disagree with this outlook. They predict that demand for memory semiconductors will continue to outstrip supply for at least the next two years, with the market size expected to grow significantly. This optimistic forecast for the market is distinct from short-term stock price fluctuations, which can be influenced by various factors including profit-taking after rapid gains.

Historical precedents show that past warnings of a semiconductor "peak out" have not always materialized, with market conditions often proving more resilient than predicted. For instance, warnings in 2017 about the end of a "super cycle" did not prevent continued growth, and a subsequent "winter looms" report in 2024 was quickly revised after HBM demand surged.

The global memory market is projected to expand dramatically, with estimates suggesting a 4.2-fold increase to 1500 trillion won this year, driven by AI investments from major tech companies. Projections indicate the market could reach $1.5 trillion by 2030, with AI chips accounting for half of that value.