Attention is focused on how long the boom in the semiconductor sector that has driven the Korean and U.S. stock markets to record highs will continue. Strong results and outlooks from major chipmakers appear to be lifting equities by outweighing uncertainties from the U.S.-Iran war and concerns over high oil prices. As artificial intelligence (AI) rapidly evolves from generative models to inference-centric ones, some analysts expect chip supply shortages to persist not only in the second half of this year but into next year.

On the 5th (local time) on Wall Street, the S&P500 index rose 58.47 points to 7,259.22, and the Nasdaq Composite climbed 258.32 points (1.03%) to 25,326.13, both closing at all-time highs.

Semiconductors led the rally in the U.S. market as well. The Philadelphia Semiconductor Index (SOX) jumped 4.2% to a record high. SOX is up 55% so far this year. With demand for AI data centers remaining solid, chip demand is spreading from AI semiconductors to general-purpose semiconductors.

In particular, shares of U.S. chipmaker Intel surged nearly 13% on the day, leading the advance. News that it could forge a ‘semiconductor alliance’ with Apple acted as a catalyst. The shift in AI development from training to inference also fueled expectations that demand will rise sharply not only for GPUs (graphics processing units) but also for CPUs (central processing units).

AMD also posted results that beat market expectations, soaring more than 7% in after-hours trading. First-quarter revenue came in at $10.3 billion, and earnings per share (EPS) at $1.37, both topping market forecasts (revenue $9.9 billion, EPS $1.28). AMD CEO Lisa Su said, “Data-center AI revenue next year will reach tens of billions of dollars.”

DRAM and NAND flash makers Micron (11.06%) and SanDisk (11.98%) also extended the rally. Anticipation of exploding demand for AI data centers and servers played a role. TrendForce projected that second-quarter contract prices for general-purpose DRAM will rise 58~63% from the previous quarter, and NAND flash contract prices 70~75%. The value of NAND, which had been relatively overshadowed by DRAM, has also surged recently in step with the full-fledged rise of ‘AI inference’.

On the 6th, as the KOSPI crossed 7,000, Samsung Electronics and SK hynix each jumped more than 10%. In memory semiconductors, their core business, AI data centers have been identified as the key bottleneck, shifting pricing power to suppliers. If shipments of the next-generation HBM4 ramp up in earnest from the third quarter, the two companies are expected to see even steeper growth in sales and operating profit.

TrendForce forecast that HBM prices could climb to nearly double next year. An official at the Ministry of Trade, Industry and Energy said, “Demand for AI infrastructure is only just beginning and there is a long way to go,” adding, “With demand running ahead and supply following, the excess-demand condition is very likely to continue not only this year but also into next year.”

Typically, high oil prices reduce the trade surplus and slow stocks, but this time is an exception. Although international oil prices are holding around $100 per barrel, the surge in semiconductor exports expanded the trade surplus to $23.77 billion in April, more than double the $8.74 billion recorded in January. Park Sang-hyun, a researcher at iM Securities, wrote in a report, “High oil prices around $100 are likely to continue, but considering the industry cycle, the size of the semiconductor surplus has ample room to expand further.”

With earnings support, some expect the semiconductor rally to continue for the time being. Hyperscalers that dictate chip demand are increasing this year’s capital expenditures centered on AI data centers. The four companiesGoogle·Meta·Amazon·Microsoftare expected to invest more than 1,000 trillion won this year.

Lee Jong-hwan, a professor in the Department of System Semiconductor Engineering at Sangmyung University, said in a phone call, “Ultimately, semiconductor demand is determined by the spread of AI, and in effect, AI is the only thing countries can lean on now,” adding, “If capital spending wraps up in one to two years it may be different, but at least through this year I expect the rally to continue.”