Why is the United States trying to hold China back? The real factors in the battle for semiconductor dominance | Mok Dae-kyun, CEO of KCGI Asset Management, & curator Park Myung-seok [Weekend Interview]
- What to look for
- You can explore a discussion that brings together the factors shaping the struggle for dominance, from differences in negotiating leverage at the US–China summit and trade-offs between rare earths and tariffs to CXMT's efforts to catch up and the gap in HBM4 yields.
- Why it matters
- This helps you understand how long-term supply agreements support a floor under profits, alongside factors requiring continued monitoring, such as developments involving Taiwan and slowing Big Tech investment, from a portfolio diversification perspective.
AI summary
CEO Mok Dae-kyun believes that at the US–China summit, the United States wants results on tariffs, rare earths, and the Iran war ahead of its midterm elections, while China has relatively more room to buy time. He explains that China's rare earth refining and magnet supply capabilities, along with its position as a major buyer of Iranian crude oil, give it negotiating leverage, whereas the United States faces financing pressures from high Treasury yields, approximately 40 trillion dollars in debt, and corporate bond issuance by AI companies. In semiconductors, he assesses that China's CXMT catching up in general-purpose and low-power DRAM could worsen a future downcycle, but Samsung Electronics and SK Hynix still maintain a substantial lead in foundry technology and stacking yields for HBM4. Long-term supply agreements and demand for HBM and data centers could support a floor under Korean memory companies' profits, but China's capacity expansion, slowing Big Tech investment, and tensions surrounding Taiwan require continued monitoring. Rather than hastily selling memory stocks bought at their highs, he suggests considering holding them while monitoring earnings and foreign investor flows, and diversifying part of the portfolio into areas such as electric power, semiconductor equipment, and materials.