▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.
[Key Issue Briefing]
■ China's DRAM offensive: ChangXin Memory Technologies (CXMT) has signaled a sevenfold surge in third-quarter revenue, accelerating its pursuit of Samsung Electronics (005930.KS) and SK hynix (000660.KS). Korean memory stocks tumbled after CXMT said it would release server DRAM with a next-generation cell structure this year, though Wall Street analysts have countered that the company's technology remains unproven.
■ Monetary policy crossroads: Forecasters overwhelmingly expect the Bank of Korea to pause after two consecutive rate increases. But with core inflation pressure building and third-quarter growth seen coming in strong, expectations are tilting toward another increase next month.
■ HBM supply chain reshuffle: Nvidia has asked Samsung Electronics, SK hynix and Micron to standardize the manufacturing process for custom high-bandwidth memory. Samsung's acceptance marks a shift away from the turnkey approach under which it produced everything from core dies to base dies in-house.
[News of Interest to Global Investors]
- Key points: CXMT, China's largest DRAM maker, estimated third-quarter revenue at 114.7 billion to 119.7 billion yuan (about 22.95 trillion to 23.95 trillion won), signaling a 589% to 619% increase from a year earlier. It also projected a swing to a third-quarter net profit of 53.395 billion to 54.895 billion yuan (about 10.6 trillion to 10.9 trillion won). Tesla CEO Elon Musk wrote on X on the 15th that China would produce enormous volumes of memory chips (RAM) in 2028, while Apple CEO John Ternus described the memory shortage as an absolute crisis and suggested the company was considering the use of Chinese-made products. On the 9th, CXMT said it would release server DRAM this year using a 4F² (4F square) structure that cuts cell area by about 33% compared with the existing 6F² design. Shares of Samsung Electronics and SK hynix subsequently plunged 17.8% and 24.3%, respectively, in the past week alone. Rosenblatt analyst Kevin Cassidy, however, said that given CXMT's process capabilities, its 4F² cell could in fact be about 34% larger than rivals' existing products, and that the company may prove to be a paper tiger.
- Key points: The Bank of Korea is widely expected to keep its benchmark rate unchanged at the current 3% level at its Monetary Policy Board meeting on the 22nd. In a survey of 20 economics and business professors and financial experts conducted by The Seoul Economic Daily on the 18th, 19 respondents (95%) predicted a hold. Chung Yong-taek, chief economist at IBK Investment & Securities, said that having moved preemptively with two increases, the central bank needs time to assess the policy impact. For the timing of the next increase, 18 experts (90%) pointed to November, the most of any month, while core inflation was cited as the biggest variable in rate decisions by 16 respondents (80%). Separately, nine respondents (45%) — the largest group — said the government would use excess tax revenue to cut treasury bond issuance by 5 trillion to 10 trillion won in November and December. The average won-dollar exchange rate this month has fallen to 1,342.6 won, and seven experts (35%) — the most — projected a year-end rate of 1,340 to 1,360 won.
- Key points: Analysts say implementing MASGA (Make American Shipbuilding Great Again), the Korea-U.S. shipbuilding cooperation project, will require clearing the hurdles of U.S. shipbuilding protection laws and congressional opposition. U.S. President Donald Trump signed a presidential memorandum on Aug. 13 this year expanding the use of overseas shipyards, and the Defense Department requested $1.85 billion (about 2.475 trillion won) to review the construction capacity of allied shipyards. But the U.S. House of Representatives included a provision restricting purchases of warships built overseas in the fiscal 2027 National Defense Authorization Act (NDAA) it passed in July, and the Senate Armed Services Committee drafted legislation allowing an exception for only up to two non-combat support vessels, conditional on direct investment in the U.S. shipbuilding industry. The Jones Act, enacted in 1920, and the Byrnes-Tollefson Amendment, which in principle bars overseas construction of U.S. warships, are also cited as obstacles. The legal conditions differ, however, when Korean companies invest in shipyards on U.S. soil or build vessels at local facilities, according to one interpretation.
[Reference News for Global Investors]
- Key points: Shares of CATL, the world's largest battery maker, have lost 24% in two weeks and 40% from their early-May peak. Yet it was media outlets under Chinese authorities that stepped in to defend the company. The trigger was Xiaomi's declaration on the 4th of last month that it would develop its own batteries, along with Li Auto becoming the second-largest shareholder of Sunwoda, which spread concerns about a "de-CATL" shift. China Industry and Information Technology News, affiliated with the Ministry of Industry and Information Technology, ran an editorial defending the company, saying claims that dress up supply chain diversification as "de-CATL" could not be tolerated. Around the same time, meme videos satirizing Huawei's new-vehicle launch event were deleted en masse after the company filed complaints, stirring a censorship controversy. That came while the Cyberspace Administration of China has been running its "Clear and Bright" campaign since May this year to crack down on false information about companies. With domestic demand weak for an extended period, exports by leading firms such as Huawei and CATL have become effectively the only pillar supporting China's economy, and economic and social stability is the top priority for President Xi Jinping, whose bid for a fourth term will be decided at next year's 21st Party Congress, according to one interpretation.
5. [Exclusive] Samsung Electronics to Build "Next-Generation HBM" With TSMC
- Key points: Samsung Electronics has decided to produce the base die, a core component, using TSMC's process as it develops Nvidia's next-generation custom high-bandwidth memory (HBM). Nvidia asked Samsung Electronics, SK hynix and Micron — the suppliers tapped to produce NVHBM, the custom HBM it unveiled in August this year — to make base dies on TSMC's 3-nanometer process and to standardize core dies on the sixth-generation DRAM process (1c), because inconsistent manufacturing methods across suppliers make it difficult to deliver designed performance consistently. This is the first time Samsung Electronics has partnered with TSMC at the HBM manufacturing stage rather than in packaging, marking a change to the turnkey approach under which it has produced both core dies and base dies in-house. Samsung Electronics plans to stick with its turnkey strategy for standard HBM products and custom HBM for other customers such as AMD, and says it is also testing the possible use of its own foundry in case NVHBM demand exceeds TSMC's production capacity.
- Key points: As the management control dispute at Hanmi Science intensifies, warning lights are flashing over risk management at Hana Securities, which extended a stock-backed loan to Hanyang Precision Chairman Shin Dong-kuk. A court granted a provisional attachment requested by Song Young-sook and Lim Joo-hyun, the mother and daughter on the Hanmi Pharmaceutical Group side, on about 10 billion won worth of Shin's Hanmi Science shares, restricting the disposal of and exercise of rights over the collateral shares. Claims have also been raised that Shin violated Article 133, Paragraph 3 of the Financial Investment Services and Capital Markets Act — which imposes a tender offer obligation when a shareholder holding 5% or more buys shares from 10 or more parties off-exchange within six months — in buying a large stake off-exchange in the first half of this year. If a violation is confirmed, sanctions such as a ban on exercising voting rights or an order to dispose of shares could follow. Shin executed and refinanced loans through Hana Securities (about 230 billion won) and the Korea Securities Finance Corp. With the provisional attachment and the risk of losing voting rights overlapping, the chance has grown that procedures to recover principal by enforcing collateral in an emergency will become complicated or face lengthy delays.
