Asian semiconductor stocks jumped on July 23 after Alphabet raised its 2026 artificial-intelligence spending forecast, giving South Korea's SK Hynix and Samsung Electronics, along with Taiwan's MediaTek, their strongest one-day gains in weeks. The rally capped three volatile weeks for the region's chip sector, a stretch that began with Samsung's own record-breaking, and market-punishing, profit guidance on July 7 and now builds toward the company's full second-quarter results, due July 30.
Underneath the daily swings sits a simpler dynamic: East Asia's memory and foundry makers are now trading almost in lockstep with the spending decisions of a handful of American hyperscalers, even as their own demand cycle looks stronger than it has in years.
A Rally Built on One Earnings Call
Alphabet raised its full-year 2026 capital-expenditure forecast to a range of $195 billion to $205 billion, up from the $180 billion to $190 billion it had guided in April, on a July 22 conference call following second-quarter results. Revenue climbed 24% to $119.8 billion, and Google Cloud sales surged 82% to $24.8 billion, according to the company's own earnings release. Chief Financial Officer Anat Ashkenazi told analysts that spending on AI infrastructure next year would be "meaningfully higher" still, even as free cash flow turned negative by roughly $5.9 billion for the quarter, the first such result since Alphabet's 2004 Nasdaq listing.
Investors read the guidance as a direct signal to Asia's memory and foundry suppliers, each of whom captures a slice of every dollar hyperscalers spend on servers and accelerators. The reaction across regional markets was immediate and, in a few cases, sharp:
- SK Hynix, which gets more than 7% of its sales from Alphabet, climbed as much as 6.5% intraday in Seoul and closed up 4.86% at 1,919,000 won.
- Samsung Electronics rose 3.65% to 270,000 won.
- MediaTek, the Taiwanese chip designer reported to be developing custom processors for Alphabet, gained as much as 5.2% in Taipei trading.
- South Korea's Kospi index advanced more than 3%, and Japan's Nikkei 225 added roughly 1%; SoftBank Group closed up 3.77% at 5,918 yen, while Kioxia briefly rose before reversing to finish down 3.72% at 61,880 yen.
The rally arrived against a starker backdrop. Brent crude was trading near $96 a barrel and short-dated US Treasury yields were climbing the same week, leaving regional markets balanced between an AI-spending boom on one side and a genuine energy shock on the other.
The Selloff That Started It
Three weeks earlier, the mood in Seoul had run in the opposite direction. Samsung filed preliminary guidance with Korean regulators on July 7 projecting second-quarter operating profit of roughly 89.4 trillion won, or about $58 billion, a jump of close to 19-fold from the 4.7 trillion won the company reported in the same quarter of 2025. Consolidated sales were guided at approximately 171 trillion won, a figure that fell short of analyst consensus.
Despite the record profit, Samsung shares fell as much as 10% in Seoul trading that day, according to Yahoo Finance; other market reports put the same-session decline closer to 6–7% by the close. The stock had risen nearly 150% over the prior year, and the reaction read as a textbook sell-the-news trade once the scale of the beat became clear. Deutsche Bank analysts noted the results were "only" 6% ahead of estimates, a margin apparently too thin to justify the run-up, while Trade Nation's David Morrison flagged doubts about whether chipmakers can sustain current sales and margin levels through the rest of the year.
The selloff wasn't confined to Samsung. Micron fell more than 4%, and Western Digital and SanDisk both dropped over 7% the same day, as investors reassessed the entire memory sector rather than treating the guidance as company-specific news. Samsung, SK Hynix, and Micron had each briefly crossed $1 trillion in market valuation back in May, before pulling back on the same underlying worry: that AI-related chip demand had been priced for perfection.
What's Actually Driving the Numbers
Behind Samsung's guidance sits a genuine supply squeeze. Demand for high-bandwidth memory and conventional DRAM used in AI data centres has tightened availability across the industry, and Wall Street analysts expect the resulting price increases to persist into 2027, according to Yahoo Finance's coverage of the sector. Samsung remains the world's largest producer of both DRAM and NAND flash, a position that leaves it more exposed than most rivals to swings in AI infrastructure spending, for better or worse.
Not every signal points the same direction. SK Hynix has reportedly pushed back part of its HBM4 capacity expansion in favor of higher-margin DDR5 production, a shift market commentary describes as a supply-chain rebalancing rather than evidence that AI memory demand itself is cooling.
The price data underscores how far the shortage now reaches beyond specialised AI chips. Citi Research figures cited in market reports put average DRAM contract prices up 44% quarter-on-quarter in the second quarter, with NAND prices rising 53% over the same period. Analysts attribute that spread across the entire product stack, rather than HBM alone, to a broader shift: agentic AI applications increasingly need large pools of conventional server memory, not just fast inference silicon, which is pulling ordinary DRAM and NAND into the same demand spike that first hit high-bandwidth memory.
What July 30 Is Supposed to Answer
Samsung has scheduled its full second-quarter earnings call for 10 a.m. Korea Standard Time on July 30, to be delivered by conference call and live audio webcast through its investor-relations site. Unlike the July 7 preliminary filing, the July 30 release will break results out by division, covering semiconductors, mobile, displays, and consumer electronics, for the first time this quarter. A question-submission window for the call has been open since July 7 and requires pre-registration ahead of the session.
That divisional detail is what investors are actually waiting on. The July 7 guidance confirmed the scale of Samsung's memory-driven profit but said nothing about how the mobile, display, or consumer-electronics units performed on their own, or how much of the semiconductor division's gain came from HBM specifically versus broader DRAM and NAND pricing across the rest of the product line.
Bubble Talk Hasn't Gone Away
Warning signs persisted even as headline numbers kept improving. Bank of America's Bubble Risk Indicator reached 0.91 out of a possible 1.0 for semiconductor stocks on July 1, and the SOXX chip-sector ETF fell 6.4% that same day, a move BofA analysts characterized at the time as an air pocket rather than the start of a broader correction.
Elsewhere in the AI-hardware supply chain, sentiment stayed firmly bullish. Super Micro Computer surged 24% after disclosing a $60 billion order backlog and nearly doubling its gross-margin guidance to 15–17% from 8.2–8.4%. Hyperscalers collectively are still guiding toward roughly $725 billion in combined 2026 AI capital spending, up 77% from 2025, a figure cited in market commentary as evidence that the underlying buildout remains intact despite the daily volatility in chip stocks.
The memory shortage is also starting to show up outside the chip sector's own earnings reports. Apple raised prices on MacBook and iPad models to offset higher component costs, a move that signalled to the wider market whether elevated memory pricing might eventually dent end-consumer demand rather than just chipmaker margins. Macro conditions have not helped nerves either: the US Federal Reserve, under new Chair Kevin Warsh, delivered a hawkishly received policy signal, with nine of eighteen policymakers now projecting a 2026 rate increase, up from zero as recently as March, according to reports on the Fed's projections.
Samsung's July 30 call is the next scheduled data point the market will use to decide which story is closer to right.