KB Securities “AI investment direction will not change until 2028 despite concerns about U.S. regulations”

KB Securities predicted on the 11th that despite concerns about the U.S. Democratic Party's strengthening of artificial intelligence (AI) regulations, it is unlikely that AI infrastructure investment will actually decrease by 2028, considering data center projects already in progress.

After the U.S. midterm elections, the possibility of AI regulation by the Democratic Party was highlighted, and the stock prices of Samsung Electronics [005930] and SK Hynix [000660] fell more than 50% from their peak, but the two stocks were presented as top stocks, saying that actual semiconductor demand and long-term performance prospects are rather solid.

Kim Dong-won, head of research at KB Securities, said, “Considering the AI ​​data center project already in progress, it is estimated that the reduction in AI infrastructure investment due to Democratic Party regulations by 2028 is unlikely to become a reality.”

In fact, TSMC, the world's largest foundry (semiconductor consignment production) company, recorded sales of NT$586.9 billion last month, a 59.7% increase from a year ago, the highest ever on a monthly basis. Cumulative sales since January also increased by 43.3% compared to the same period last year.

KB Securities evaluated that this increase in sales shows that demand for advanced semiconductors for AI accelerators and high-performance computing (HPC) remains strong.

In particular, as demand for NVIDIA's graphics processing units (GPUs) and AI semiconductors developed in-house by big tech companies is increasing, demand for AI memory such as high bandwidth memory (HBM) is expected to continue, further increasing TSMC's fourth quarter performance outlook.

Director Kim said, “Unlike the large stock price adjustment, the long-term performance of Samsung Electronics and SK Hynix is ​​being adjusted upward,” and evaluated that the recent stock price decline excessively reflects policy uncertainty. He added, “The direction of AI investment will not change.”

The previous day's regular market closing prices for Samsung Electronics and SK Hynix were 198,900 won and 1,212,000 won, respectively.