{"text":[[{"start":11.15,"text":"Samsung Electronics shares tumbled 10 per cent on Tuesday despite the chipmaker boasting a third straight quarter of record operating profit, in a sign of investor concern about returns on massive AI investment."}],[{"start":24.75,"text":"The world’s largest memory-chip maker by sales forecast operating profit of Won89.4tn ($58.4bn) for the second quarter, up 19-fold from a year ago, as acute supply shortages continued to drive up memory chip prices amid booming demand fuelled by the AI race."}],[{"start":44.65,"text":"The figure exceeded Samsung Electronics’ profit for all of 2025 and narrowly beat analysts’ expectations of Won87.3tn, according to LSEG SmartEstimate. Sales at the South Korean company were estimated to more than double from a year earlier to Won171tn."}],[{"start":63.4,"text":"Producers of memory chips have been among the biggest beneficiaries of the AI infrastructure build-out. Samsung Electronics’ shares have more than doubled this year, lifting its market capitalisation above $1tn."}],[{"start":76.2,"text":"But chip stocks have come under pressure as the industry’s aggressive expansion plans fuel concerns over future oversupply, alongside reports that Meta plans to sell excess computing capacity to external customers as part of a push into cloud services."}],[{"start":91.4,"text":"The steep fall in Samsung’s shares was part of a broader decline among chipmakers. SK Hynix fell 10 per cent and Japan’s Kioxia slipped 11 per cent."}],[{"start":101.25,"text":"South Korea’s Kospi index, which is heavily influenced by Samsung and SK Hynix, fell 8 per cent, triggering a trading halt. The index is up more than 70 per cent this year."}],[{"start":113,"text":"The two South Korean companies are leading suppliers of high-bandwidth memory chips used in AI data centres. The manufacturers’ focus on higher-margin HBM products has constrained supply of conventional memory chips used in consumer electronics."}],[{"start":128.15,"text":"“DRam and Nand prices continue to exceed prior assumptions, reflecting ongoing tight supply conditions,” said Jing Jie Yu, an analyst at Morningstar, in a recent report. “Hyperscaler-led AI investments remain robust, and resulting memory demand is driving unusually strong bargaining power for memory makers.”"}],[{"start":148.35,"text":"Average selling prices for DRam chips, which store data temporarily, and Nand chips, which can store data without a power source, rose 44 per cent and 53 per cent, respectively, in the second quarter from the previous three months, according to Citi."}],[{"start":163.65,"text":"Nomura expects commodity DRam and Nand prices to rise by a further 25 per cent and 24 per cent this quarter, supported by stronger demand from consumer electronics and data centres."}],[{"start":175.3,"text":"Despite widening margins, Samsung said its total operating profit was reduced by provisions for employee bonuses. The company reached an agreement with its labour union in late May to pay out 10.5 per cent of the chip division’s operating profit as a special bonus. Samsung will release detailed results later this month."}],[{"start":194.75,"text":"While analysts expect supply shortages to persist into next year, some investors have become more cautious about the sustainability of AI spending by large technology companies."}],[{"start":206.1,"text":"JPMorgan said investors were increasingly questioning whether AI memory’s share of cloud service providers’ capital expenditure — estimated at 52 per cent this year and more than 70 per cent next year — could be maintained."}],[{"start":220,"text":"Samsung and SK Hynix have said they plan to invest a combined $2tn to expand chip production in South Korea. Samsung’s investment will run from 2026 to 2040, while SK Hynix has not disclosed a timeline."}],[{"start":236.5,"text":"SK Hynix kicked off marketing on Monday for its near-$30bn US listing to help fund its expansion. Its American depositary receipts are due to begin trading in New York on Friday."}],[{"start":249.75,"text":"In a sign of market exuberance, exchange traded funds issuer ProShares said on Monday it would launch a leveraged ETF promising twice the daily return of SK Hynix’s ADRs next Monday."}],[{"start":269.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1783403192_4260.mp3"}