Big positive for equipment and materials stocks.

Yesterday, the South Korean government called in Samsung and SK Hynix and asked them to publicly promise to invest heavily in building a large number of memory factories in South Korea over the next decade.

Today, Samsung Group announced plans to invest more than 1,000 trillion won (approximately $648 billion) over the next 10 years, of which about 300 trillion won ($194 billion) will be specifically used to expand and build additional chip manufacturing facilities in the southwestern part of South Korea.

Let’s first look at the capital flow logic:

**Step 1:** Cloud companies give money to Nvidia.
Microsoft, Meta, Amazon, and Google, in order to build AI data centers, are making large-scale purchases of GPUs, complete systems, networks, and AI systems. As a result, Nvidia first captures the biggest incremental revenue and profit leverage, which has been the core pricing logic behind the AI bull market over the past two years.

**Step 2:** Nvidia’s growth pushes storage into becoming the new bottleneck.
The more GPUs are sold, the more AI servers there are, and the greater the demand for HBM, high-end DRAM, NAND, and advanced packaging. At this point, the profit pool begins to spread from “compute chips” to “storage supply.” Micron, SK Hynix, and Samsung are not just rising because of a simple cyclical recovery; it’s because they have become an indispensable part of the AI factory ecosystem.

**Step 3:** After storage companies make money, they must continue to expand capacity.
To meet long-term orders from AI customers, Micron, SK Hynix, and Samsung must increase capital expenditures—building factories, buying equipment, doing advanced packaging, and improving yield. As a result, new orders start flowing to equipment companies such as AMAT, LRCX, KLAC, and ASML, as well as to upstream materials, components, and facility engineering companies.

Why has storage capacity expansion happened only now? Because expanding storage production costs extremely large amounts and carries very high risk. Samsung, SK Hynix, and Micron may not want to proactively expand, but storage is already a strategic bottleneck in the AI computing power chain, and political forces will not allow them to follow their own pace.

Yesterday’s Apple price increase is a signal. Even Apple’s profits have been squeezed, forcing it to raise prices—other companies can only imagine what comes next. If storage price increases push inflation upward through consumer electronics, the government absolutely cannot agree. Storage has already shifted from a previously fragmented, each-fighting-for-itself game to a coordinated, collective action organized at the national level.

And within this process, the most direct and the most certain beneficiaries are the equipment and materials companies—these companies receive the most direct positive outlook.

**ASML — monopolizes lithography.**
High-NA EUV is a key variable for advanced process technology to keep moving forward over the next five years. If AI chips are to continue shrinking, stacking, and improving energy efficiency, lithography cannot bypass ASML.

**KLA — monopolizes yield control.**
As advanced processes move further along, yield becomes even more critical. Wafer fabs may buy a bit less equipment, but they cannot accept yield getting out of control. KLAC’s strongest point lies in its installed base and service revenue; its profit margins are already approaching those of software companies.

**Lam Research — monopolizes etching.**
HBM, NAND, and advanced DRAM all rely on etching. More importantly, Lam’s dry resist Aether has already been selected by a leading memory manufacturer as the mass-production process benchmark equipment for the most advanced DRAM node.

**AMAT — monopolizes thin-film deposition, PVD, and ion implantation.**
Opportunities are in 2nm and advanced packaging. AMAT is a part of TSMC’s CoWoS-L supply chain, and downstream of that are Broadcom and Marvell, which correspond to AI ASIC demand.

After this, I will publish investment research reports for each equipment and materials company. If you have questions, feel free to discuss them together in the group. #美光市值超越Meta跻身全美前十