AI Memory Demand Hasn't Peaked, Korea's Central Bank Argues

Tech markets have been nervous lately. AI stocks are sliding, Nvidia’s decline is pulling down semiconductor indexes, and Korea’s two biggest memory makers have taken significant hits. Samsung Electronics dropped 9% on a single day in early July. SK Hynix fell nearly 15% from recent highs. The narrative has shifted from “AI changes everything” to “maybe we got ahead of ourselves.”

Korea’s central bank disagrees.

The Bank of Korea published a report Monday arguing that the current AI-driven semiconductor supercycle still has room to run. The report, submitted to lawmaker Park Sung-hoon, says the global chip market remains supply-constrained and that the structural forces behind this cycle are different from past booms. That makes it more durable.

“In the past, semiconductor upswings were driven by cyclical consumer demand,” the report notes. “This time, the driver is competitive corporate investment in AI infrastructure.” Companies are racing to build out compute capacity for the next wave of artificial intelligence, and that kind of spending does not follow the same rhythms as consumer gadget cycles.

The key bottleneck is supply. High-bandwidth memory, or HBM, is the ultra-fast memory that sits alongside AI accelerators. It is not a mass-market product. Each new generation requires tighter integration between memory makers and chip designers, and the customized production process makes it hard to ramp up quickly. The BOK expects that constraint to sustain the market’s expansion “for a considerable period.”

That is not the consensus on Wall Street right now. Investors have been rotating out of tech stocks, worried about overvaluation, debt-fueled AI infrastructure spending, and the possibility that memory supply could eventually outrun demand. Even strong earnings have not stopped the bleeding. Samsung reported second-quarter operating profits near 90 trillion won (roughly $45 billion), above market expectations, and the stock still fell 7% on the day.

The BOK acknowledges the risks. “The speed and scope of AI technology adoption, as well as its ultimate profitability, remain uncertain,” the report says, providing a measured counterpoint to its own bullish outlook.

Still, the central bank points out that major investment banks including JPMorgan, Goldman Sachs, and Morgan Stanley broadly expect the global semiconductor market to keep growing through at least next year. The question, the report implies, is not whether the cycle ends, but when supply catches up enough to change the math.