The AI Chip Bubble: Why South Korea & Taiwan Are In the Danger Zone | Michael Fritzell | Asian Century Stocks
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South Korea, I do think it is a bubble because the estimates for Ford profits for SK Hynix and Samsung Electronics, we're now talking 200,000,000,000 US dollars in net profit estimates for 2028. That will make them the most profitable companies in the world. These are companies that produce commodities. I wouldn't say that the memory chip cycle is over. In fact, I'm not able to confidently predict how the cycle is going to move, but I'm also very, very confident that these Chinese competitors that have been trying to improve their yields, they are now very profitable and they will come with ne
Welcome to Other People's Money. My name is Max Wheatley. I am joined today by Michael Fritzell, the author of Asian Century Stocks that, as its name suggests, focuses on equity research in Asian companies. Michael, thank you for coming. It's an absolutely fascinating time to be looking at Asian stocks with indexes representing countries like South Korea and Taiwan soaring, while the countries like China and India that have long been cited as the de facto leaders in Asia are some of the worst performing markets in the world. So just incredible dispersion in outcomes, at least at the index leve
I have invested in investing in Asia now for almost twenty years. And through that process I've seen you know cycles come and go and what's so good about the geography is that it's a huge breadth of companies and regions is huge in terms of what you can invest in. So Asia Pacific is 4,000,000,000 people if you include The Middle East and includes countries like India and China, each of them have something like 5,000 stocks. And I'm based in Southeast Asia and another 500,000,000 people and what's good about the opportunity set as an investor is I can choose which country I invest in and they'r
Well, I know you have opinions about the index construction in Asia, but it's really the best thing we have as a measurement for these markets. And, you are correct. The the EWY, which I like because it you can do total return and it's in dollars. The EWY iShares MSCI Korea ETF is up 255%, over one year, and Taiwan is up a measly a 112% over that same period of time. So, you know, naturally, you're comparing to 2021, you're comparing to ninety nine two thousand. Would you call that a bubble?
I think it is because specifically South Korea, I do think it is a bubble because the estimates for Ford profits for SK Hynix and Samsung Electronics, we're now talking 200,000,000,000 US dollars in net profit estimates for 2028. 200,000,000,000 and $250,000,000,000 that will make them the most profitable companies in the world. And these are companies that produce commodities. So I wouldn't say that the memory chip cycle is over, in fact I'm not able to confidently predict how the cycle is going to move, but I'm also very, very confident that these Chinese competitors that have been trying to
So China declaring that a particular industry needs to ramp its output for national security, national economic reasons is a cycle that has played out many, many times. It's not surprising that they would look at the memory bottleneck and say this needs to be solved, and it needs to be solved by Chinese companies. So my my big question would be, who are these Chinese competitors, and have they participated in the same way in some of this run up? Are the are the also RANs in the memory space that are going to be ramping production starting to see a move in price to front run that production tha
Well, according to what's been disclosed publicly, they are expanding capacity rapidly, Yangtze River Me
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