◆Aju Economic News Major News
▷Chinese semiconductor companies are rushing to IPOs, marking the start of 'Semiconductor Ascendancy Season 2'.
- Six Chinese semiconductor firms, including CXMT and YMTC, have either gone public or are in the process since June. This surge is attributed to the Chinese government's increased support for the capital market to achieve self-sufficiency in AI and semiconductors.
- CXMT is set to list on the Shanghai Star Market on July 27, with an expected fundraising amount of approximately 14.7 trillion won, the largest in history. The funds raised are anticipated to accelerate production capacity expansion and R&D investment.
- As Chinese companies ramp up production, there is a possibility of intensified competition in the general DRAM market and pricing after 2028. However, due to technological gaps, the impact on domestic companies in the HBM sector is expected to be limited for the time being.
◆Key Reports
▷Expansion of AI Investment Cycle and Credit Differentiation Among Companies [iM Securities]
- The AI investment cycle is spreading to big tech, hyperscalers, and semiconductors, with ongoing growth in investment spending and funding demand as it evolves from generative AI to agentic and physical AI. Analysts believe it is still too early to assess a slowdown in the AI cycle.
- Despite the spread of affordable AI models reducing costs, there is a potential for increased usage, reflecting 'Jevons Paradox'. The expansion of AI applications in coding, search, and customer service is expected to generate additional demand, supporting the AI investment cycle.
- However, the burden of substantial upfront investments and funding is leading to increased credit differentiation among companies. Oracle's credit rating was downgraded to BBB- due to rising debt from expanded AI infrastructure investments and profitability uncertainties, while other hyperscalers remain relatively stable. The issuance of corporate bonds related to AI has surpassed $200 billion, making it crucial to focus on individual companies' fundamentals and stock selection rather than ratings.
◆Major Announcements After Market Close (July 22)
△SK Hynix has decided to invest in new facilities to secure a production base in Cheongju to meet global AI memory demand.
△PS Electronics has signed a supply contract for high-performance server equipment and components.
△Intusell has entered into a technology transfer agreement for its ADC platform candidate SBE303, targeting Nectin-4 protein for solid tumor treatment.
△Dongbu Construction has been selected as the qualified contractor for the construction design of the Jangji parking lot project.
△Kolon Global has terminated its single sales and supply contract with the Hadan District Reconstruction Maintenance Project Association.
◆Fund Trends (as of July 21, excluding ETFs)
▷Domestic equity: -100 million won
▷Overseas equity: -51.4 billion won
◆Key Schedule for Today (July 23)
▷South Korea: GDP Growth Rate (Q2)
▷United States: Chicago Fed National Activity Index
* This article has been translated by AI.
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