AI Semiconductors Project Double Growth Amidst Soaring Interest Rates

Interest rate hike pressures intensified, with the 10-year Treasury yield re-entering the 5% level and short-term yields rising by 5 to 6 basis points. As a result, risk assets across the board were unable to avoid a decline.

However, the semiconductor sector showed differentiated performance amidst these market trends, recording a mid-2% increase.

Memory semiconductor-related stocks showed particularly strong gains, with SanDisk rising over 10% and Western Digital also seeing a significant increase. Micron Technology, which tends to move in sync with the Korean market, also showed strength in the 4% range.

Along with this strength in memory semiconductors, semiconductor equipment stocks also generally performed well, reflecting expectations for capital expenditure demand.

This is driven by the forecast that demand for AI semiconductors will increase explosively.

Increased GPU production is expected to surge memory demand, exacerbating bottlenecks in the memory sector. Accordingly, demand for semiconductor equipment to expand production facilities is also expected to rise in tandem.

The market's main focus going forward will be how it interprets and responds to changes in interest rates. In particular, selecting and investing in companies that can maintain growth despite high interest rates will be key.

In this situation, semiconductor companies are expected to continue their rapid growth, attracting significant investor attention.

CEO Jensen Huang is leading this change and is hailed as an 'evangelist for a fully online cyber world'.

The market experienced a sharp correction in July, but Jensen Huang's message remained consistent, while the market's reaction changed. This is not unrelated to shifts in the credit market.

Key to this is SoftBank's ability to secure approximately $9 billion in loans from Apollo. The fact that SoftBank, which is all-in on AI, can once again raise capital is an important signal that the tightening of the credit market is easing.

Apollo, a major financial institution, injecting funds into SoftBank is interpreted as a market signal beyond just a loan. This can be taken as an assurance of profitability.

Positive evaluations from credit market players, rather than industry insiders, are particularly important. The fact that a company like Apollo, which is skilled in risk management and has grown, is lending money increases confidence in the investment target.

This restoration of confidence in the credit market is acting as a major factor driving the rebound in semiconductor stocks.