Samsung Electronics (SSNLF) is enjoying one of the biggest profit booms in technology history.
That accomplishment has also created a new danger.
The Bank of Korea predicts that South Korea’s semiconductor exports could fall by $50 billion to $100 billion next year if major U.S. technology companies cut spending on artificial intelligence infrastructure, Reuters reported.
In its gloomy scenario, the central bank forecasts a 10% decline in Korean semiconductor prices.
That would be significant enough to reduce South Korea’s economic growth by around 0.4 percentage points and significantly lower its current-account surplus compared to the bank’s earlier 2027 forecast.
Amazon, Google, Microsoft, Meta, and Oracle’s combined capital expenditure has grown rapidly from $40 billion last year to $80 billion this year and $110 billion next year, according to the report.
The risk is basic for Samsung and SK Hynix (SKHY).
If the corporations constructing data centers determine they have enough capacity, the same AI expenditure spree that has driven memory costs and earnings to record highs might have the opposite effect.
Samsung shows how powerful the AI memory boom has become
AI has transformed Samsung’s semiconductor industry to an extent that cannot be overstated.
Samsung anticipates an operating profit of around 107.4 trillion won and sales of approximately 195 trillion Korean won in the third quarter.
The stated operating profit would be almost nine times more than it was a year ago.
According to Samsung, second-quarter sales were 171.5 trillion won and operating profit was 89.49 trillion won.
The primary engine has been memory.
As businesses develop more potent AI systems, demand for high-bandwidth memory, NAND storage, and traditional dynamic random-access memory, or DRAM, has increased dramatically.
High-bandwidth memory, also known as HBM, is located near sophisticated AI processors and provides them with massive amounts of data at very high rates.
Among the businesses at the heart of that market are Samsung and SK Hynix.
Reuters reported that Samsung’s third-quarter HBM shipments may have increased close to 50% from the previous quarter.
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The same research also mentioned something that investors shouldn’t overlook.
Despite record results, Samsung shares had dropped more than 25% from their June peak as investors wondered how long the AI-driven memory boom would persist.
That is the tension behind the Bank of Korea’s warning. Current results are extraordinary. The market is already asking what happens when they stop being extraordinary.
SK hynix is even more exposed to AI memory
In July, the memory chip firm started trading US depositary receipts on Nasdaq under the symbol SKHY.
Revenue for the second quarter was 79.3 trillion won, rising 257% from the same period last year.
At 60.5 trillion won, operating profit increased by 557%.
According to SK hynix, strong demand for expanding AI infrastructure and higher-value products drove the record quarter.
Additionally, SK Hynix has been increasing HBM output and entering into longer-term contracts with significant clients.
Revenue may become more predictable as a result.
The fundamental reliance on investment in AI infrastructure remains.
Samsung and SK Hynix may continue to offer limited memory at exorbitant costs if hyperscalers keep building data centers.
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Memory supply can quickly catch up if those customers slow down construction.
This development is significant since the market for memory chips has always been cyclical.
Prices and profits rise dramatically when there is insufficient supply.
Both may be sent in the other direction by an excess of supply.
In essence, the Bank of Korea’s scenario asks what would happen if the present shortfall started to reverse more quickly than anticipated.
South Korea’s economy now depends heavily on the same trade
There is far more danger than just two businesses.
South Korea’s economy expanded by 1% in the third quarter, above the 0.7% growth tipped in a Reuters poll of economists.
The Bank of Korea’s August economic outlook explicitly assumed that global AI infrastructure investment would continue expanding and support strong semiconductor exports into 2027.
Spending on semiconductor manufacturing equipment contributed to a 4.1% rise in facilities investment and a 2.3% increase in exports.
In the first nine months of 2026, South Korean exports surpassed $800 billion, breaking the previous full-year record.
For the first time, the nation’s yearly exports are on track to surpass $1 trillion.
That seems really encouraging.
It also demonstrates how concentrated the boom has become.
In its August economic forecast, the Bank of Korea made the explicit assumption that robust semiconductor exports through 2027 would be supported by the continued expansion of global investment in AI infrastructure.
According to the central bank, the semiconductor cycle is one of the biggest uncertainties surrounding its projection.
The new $100 billion downside scenario quantifies this uncertainty.
A 10% price decline could matter more than slower chip shipments
The 10% drop in semiconductor unit pricing may be the most significant premise in the Bank of Korea scenario.
This is due to the fact that the memory business is now profiting from both very high prices and growing demand.
It’s not necessary for consumers to cease purchasing chips for Samsung and SK Hynix’s profits to decline.
All that needs to happen is for prices to slow down.
The memory supply imbalance may continue until 2028, according to Samsung and Micron (MU).
However, Reuters already anticipates that traditional DRAM contract-price growth will slow down.
TrendForce predicts that DRAM contract prices would rise by just 10% to 15% in the fourth quarter after a nearly 60% sequential surge in the second.
That does not imply that the boom is coming to an end.
It does imply that investors need to differentiate between strong and rising demand.
If prices cease rising at the same rate, Samsung can continue to sell massive amounts of memory even as profit growth slows.
The gloomy scenario put forward by the Bank of Korea predicts a real drop in prices.
Even if shipments of actual chips remained quite strong, that would still affect export values.
Big Tech spending is becoming the number to watch
The crucial signal for investors in Samsung and SK Hynix may increasingly come from businesses located thousands of miles away.
Large quantities of money are being spent by Amazon, Alphabet, Microsoft, Meta, and Oracle to develop AI infrastructure.
In the end, this expenditure generates demand for servers, networking hardware, GPUs, and massive quantities of memory.
The Bank of Korea is successfully alerting people that South Korea is now heavily dependent on capital expenditures.
This produces an odd chain:
AI servers, memory demand, chip prices, Samsung and SK Hynix profits, and South Korean exports and economic growth are all linked to Big Tech capex.
Currently, every connection is favoring South Korea.
The numbers are so high because of these factors.
It’s also why a reversal could hurt.
Samsung reports detailed third-quarter results on Oct. 29, when investors will get another look at memory profitability and management’s outlook for AI demand.
Whether demand for AI is still high may not be the most crucial issue.
It probably will.
The harder question is whether demand can remain strong enough to justify the level of production, pricing and investment that the current boom has created.
South Korea’s central bank has now put a number on what happens if it does not.
Up to $100 billion.
