South Korean Semiconductor Stocks Fall Sharply as Big Tech Investment Growth (81%) Outpaces Revenue Gains (21%)

South Korean semiconductor stocks and broader equity markets declined significantly in June and July, according to Seoul Economic Daily. Macro analyst Heo Jae-hwan at Eugene Investment Securities noted the sharp decline raises questions about the sustainability of the AI supercycle.

Big tech companies' capital expenditures are growing at 81% year-over-year, significantly outpacing revenue growth of just 21%, suggesting growing divergence between investment and actual earnings. Corporate debt is also rising rapidly, with some major tech firms like Oracle and Coreweave seeing share prices fall more than 60% from peak levels, signaling potential financial strain amid the ongoing AI investment cycle.