THE PRICE OF THE CHIP EXPORTS HAS SOARED, AND THE TIDE OF THE AI SHORTAGE CONTINUES TO INCREASE

ON 21 AUGUST, SAMSUNG RECENTLY RAISED THE PRICE OF SOME 4 NANOMETERS, 5 NANOMETRES AND 8 NANOMETERS BY 10-15 PER CENT; AND THE 2026 CAPITAL EXPENDITURE WAS ALSO RAISED TO $60-64 BILLION, REFLECTING THE CONTINUED DIFFICULTY OF FULLY MATCHING EXISTING CAPACITY WITH AI REQUIREMENTS. THIS ROUND PRICE INCREASE, WHICH FACILITATES ACCESS TO SCARCE CAPACITY STORAGE, ROUND-GENERATION AND SEALING, RAISES THE COST OF SERVERS, PCS AND CONSUMER ELECTRONICS. THE NEXT STEP IN THE MARKET WILL BE TO TRADE THE TRADE BETWEEN PROFITABLE REPAIRS AND NEW CAPACITY: THE LONGER THE SHORTAGE LASTS, THE STRONGER THE LEAD PRICING POWER; AND IF THE RATE OF EXPANSION EXCEEDS THE REAL USE OF AI, PRICE REVERSALS AND STOCK REVERSALS WILL MAGNIFY SEMICONDUCTOR STOCK VOLATILITY. KIM XIAN