▲ 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 Reversal: China's ChangXin Memory Technologies (CXMT) posted a world-leading operating margin on commodity DRAM while South Korean chipmakers focused their capacity on high-bandwidth memory (HBM). Shrinking supply of commodity memory drove DDR5 prices sharply higher and lifted earnings, and one market research firm went as far as to conclude that HBM profitability has fallen below that of DDR5.
■ Exports vs. Domestic Demand: Exports are running at record strength on the back of semiconductors, but indicators of household sentiment such as employment and consumption are struggling to keep pace. Export growth is concentrated in semiconductors, an industry with limited employment spillover, while household debt exceeding 2,000 trillion won and high prices weigh on spending capacity.
■ Widening Nuclear Gap: The Hanbit No. 2 reactor halted operations after completing its 40-year operating license period, removing all 1.9 gigawatts of the Hanbit No. 1 and No. 2 units from the power grid. With power demand forecasts from semiconductors and artificial intelligence rising steeply, the pace of continued-operation reviews for existing reactors has emerged as a key variable in power supply.
[Corporate CEO News]
1. CXMT Rides DRAM Windfall to Overtake SK hynix on Margins
- Key Summary: China's ChangXin Memory Technologies (CXMT) posted an operating margin of 82% in the second quarter of this year, exceeding both SK hynix at 76% and Samsung Electronics at 70%. The figures come from a Nihon Keizai Shimbun analysis of earnings at major memory makers in South Korea, the United States, Japan and China, which cited reduced supply of commodity memory as SK hynix and Samsung Electronics prioritized HBM shipments for AI servers. That pushed up prices of DDR5 commodity DRAM, CXMT's main product, and Taiwan's TrendForce concluded that HBM profitability has fallen below that of DDR5 since the January-March period. CXMT, which counts large technology companies including Alibaba, ByteDance and Tencent among its customers, posted second-quarter operating profit of about 1.9 trillion yen (about 16.57 trillion won), a sharp swing from a loss of 29 billion yen (about 253 billion won) a year earlier, and has already surpassed Kioxia and SanDisk in profit size.
- Key Summary: Exports totaled $34.97 billion in the first 10 days of this month, up 82.6% from a year earlier and a record high for that period. Semiconductor exports over the same period surged 270.1% to $16.48 billion, accounting for about 76% of the total increase in exports. By contrast, manufacturing employment fell by 38,000 in August, a 26th straight monthly decline, and employment among young adults dropped by 143,000 for a 46th consecutive month of decline. Retail sales fell 2.4% in July from the previous month, and the consumer sentiment index stood at 104.5 in August, down 2.3 points in a month. According to the Bank of Korea, semiconductors generate 2.4 jobs per 1 billion won of final demand, less than half the manufacturing average of 5.1, and their production-inducement coefficient of 1.500 is about 24% below the manufacturing average of 1.975. Household credit stood at 2,019.8 trillion won at the end of the second quarter, up 25.9 trillion won from the previous quarter.
3. Hanbit No. 2 Also Halts, Idling Four Reactors and Straining Power Supply
- Key Summary: The Hanbit No. 2 reactor in Yeonggwang, Jeolla Province, completely stopped generating power at 10 a.m. on the 11th after completing its 40-year operating license period. Following the earlier shutdown of Hanbit No. 1 last December, all 1.9 gigawatts from the Hanbit No. 1 and No. 2 units have been removed from the grid, and adding the Kori No. 3 and No. 4 reactors, which remain idle awaiting continued-operation approval, brings idled capacity to 3.8 gigawatts. Meanwhile, peak power demand for 2040 presented during work on the 12th Basic Plan for Long-Term Electricity Supply and Demand was put at 158.4 to 165.0 gigawatts, more than 50% above the record peak demand of about 104 gigawatts. Demand from advanced industries rose 20.6 gigawatts from earlier projections and data centers added 7.9 gigawatts, expanding the outlook by 26.6 to 26.8 gigawatts from four months earlier. Once the operating license for the 700-megawatt Wolsong No. 2 reactor expires on Nov. 1, idled nuclear capacity will rise to 4.5 gigawatts. The Ministry of Climate, Energy and Environment is reviewing a plan to extend the continued-operation period from the current 10 years to 20 years.
- Key Summary: LG CNS, the LG Group's information technology services affiliate, will purchase 381.4 billion won worth of next-generation graphics processing unit computing resources from Nvidia. LG CNS said in a regulatory filing that its board approved the purchase of Nvidia GPUs and infrastructure equipment, including the latest Vera Rubin AI servers, at a meeting on the 11th, with the amount equal to 7.2% of total assets. The investment follows a strategic memorandum of understanding signed by LG Chairman Koo Kwang-mo and Nvidia Chief Executive Jensen Huang at Nvidia's headquarters in Santa Clara, California, on the 13th of last month to pursue joint projects in three areas: humanoid robots, AI factories and mobility. The two sides also agreed to combine LG Electronics' server cooling technology, LG Energy Solution's batteries and LG CNS' data center design and operation capabilities within Nvidia's DSX data center design framework, and to build a physical AI data factory through the Physical Works robot learning platform.
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