Bloomberg says Texas alone has near “30% of the US data center capacity set to come online in 2028.” (gift link.) Its new Democratic governor wants an immediate data center moratorium. Ohio’s new governor wants a conditional moratorium. Both states have been led by Republicans who encouraged data centers, tho they already started pulling back support bc of backlash.
I saw the posts on how the US midterms affect relations w Korea and Samsung’s orders, but this is the major context.
Most Samsung and SK Hynix capacity is already booked out for years, so the impact on sales won’t be immediate. (There was news today of AMD’s order for a Samsung factory in Texas, whose production ofc won’t be a Korean export.) When that happens it could bring the won back down too. But this can affect plans for future expansion. Plus it isn’t some kind of insurance on stocks since what institutional investors consider fair valuation depends on pipeline, not just sales we already know will happen. You saw this with makers of blockbuster drugs like Gilead or Novo Nordisk, or even Hybe and the BTS tour. Basically, we know this is record setting big, but what’s next? How repeatable is it?
You even kind of saw this with Apple stock when it was considered overdependent on the iPhone, before its ‘services’ segment got bigger. That is a one tool/원툴 problem. (The baseball slang I learned from Twitch, about having only one strength instead of being a well rounded player.) The Korean RAM makers (they are SSD leaders, which AI also ‘drives’ bc you want to get to the data faster) are a little different situation. But this dependence on a single product category is similar.
I thought they should’ve hurried up and gotten into a contract foundry (what Taiwan Semiconductor does) a lot more aggressively, with some government help. *This was sort of the stated plan 5 years ago, before the AI boom, but they hesitated after a consumer downturn. Yes I know how inefficient chaebol can be and how government can distort markets. But it would’ve diversified into higher margin business. Making consumer chips not just for AI is also higher margin than all the random refrigerator and stove stuff Samsung makes. Or fitness teachers making tutorials that will never scale for Samsung Health. I found out about this when the Hyeran in my username congratulated her teacher in a story. It seemed so random, the content itself probably doesn’t cost that much since it’s not a big influencer, but the overhead and attention just feels like its branching into things it doesn’t need.
I still call Samsung a one tool bc it is over reliant on the core memory business, and the other tools aren’t that profitable, the consumer things that separate it from SK Hynix.
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