CEO of Roundhill Investments: The three-powerful alliance of memory chips is difficult to break

Dave Mazza, CEO of Roundhill Investments, an American investment company, recently accepted an interview with WeeklyBIZ, a subsidiary of Chosun Ilbo, saying that the global investment boom in artificial intelligence (AI) has driven up the stock prices of the three major Korean and American memory chip manufacturers, including Samsung Electronics, SK Hynix and Micron Technology.

Roundhill Investments launched the first memory chip-based ETF in the U.S. market in early April this year. In just 10 trading days, the asset size exceeded US$1 billion, and it was dubbed the "fastest-growing ETF in history." More than 70% of the funds in this ETF are concentrated in three stocks: Micron (25.9%), Samsung Electronics (24.9%), and SK Hynix (21.5%).

Massa said that with the signing of long-term contracts, memory chip manufacturers no longer have revenue that will be reduced by the impact of the economy or interest rates as in the past. The decline in stock prices in July this year was not a fundamental issue, but was caused by the rapid withdrawal of short-term funds.

Massa pointed out that in the process of building AI infrastructure, the most representative bottleneck is the memory chip. When talking about AI, everyone always mentions the graphics processing unit (GPU). However, without the high-bandwidth memory (HBM) manufactured by the major memory chip manufacturers, the GPU is tantamount to "an engine without fuel." There are only three companies that can mass-produce HBM, namely Samsung Electronics, SK Hynix, and Micron Technology.

Massa said that in the core field of HBM in establishing AI infrastructure, SK Hynix leads the world. Samsung Electronics has overwhelming scale in DRAM and NAND production. Both companies have solid financial structures and are worthy of continued investment.

In response to some analysts' predictions that China's Changxin Memory (CXMT) or Yangtze Memory Technology (YMTC) will soon catch up with Samsung Electronics, SK Hynix, and Micron Technology, Massa said that Changxin Memory is several generations behind in the HBM field. If it wants to narrow the gap, it needs to improve process technology and obtain quality certification from customers to solve many problems. Coupled with the export control measures led by the United States, it is difficult to introduce the most cutting-edge semiconductor equipment. Although Yangtze Memory ranks third in the world in general-purpose NAND shipments, it ranks only fifth in sales.