As Samsung Electronics records historic quarterly operating profits, even Japan—which once ceded its dominance in memory semiconductors to Korean firms—has taken note, with local media shedding light on both the pros and cons of the current memory boom.

The Nihon Keizai Shimbun (Nikkei) reported on the 8th that Samsung Electronics achieved a preliminary operating profit of 89.4 trillion won in the second quarter of this year, marking its third consecutive quarter of record-breaking performance. The report highlighted that the sharp rise in prices for artificial intelligence (AI) memory semiconductors has become a new management risk for the Korean semiconductor industry.

Nikkei mentioned that some U.S. consumers have filed class-action lawsuits, claiming that they have been harmed by "price gouging" from memory manufacturers such as Samsung Electronics, SK Hynix, and Micron.

Furthermore, the outlet pointed out that the growing trend among U.S. companies facing chronic memory shortages to turn to Chinese manufacturers like ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) is another cause for concern.

Samsung Electronics hits record-high performance [Suwon=Yonhap News]

Citing the views of Korean experts, Nikkei noted that with Samsung Electronics and SK Hynix combined holding a 60% global market share, concerns regarding trade issues are also being raised.

The concern is that a Donald Trump-led U.S. administration could take issue with the excessive concentration of the memory market in Korean firms and demand that they relocate production bases to the U.S. or increase local investments.

This appears to be a reference to the 1980s, when the U.S. utilized the U.S.-Japan Semiconductor Agreement and pressure on currency and trade to dismantle Japan's dominance in the global memory semiconductor market.

Both Nikkei and the Sankei Shimbun added that the memory market is notoriously difficult to read in terms of supply and demand, and that erroneous investment decisions carry the risk of massive financial losses.

Sankei pointed out that while the Korean semiconductor industry is planning massive investments in the hundreds of trillions of won, Japan’s leading semiconductor company, Kioxia, plans to invest 1.41 trillion yen (approximately 13.2 trillion won) by 2028—an annual average of 470 billion yen (approximately 4.4 trillion won)—which is 10% less than its previous peak annual investment.

While acknowledging that the cyclical boom-and-bust nature of the memory industry must be considered, the newspaper expressed concern that Japan might be missing out on opportunities, as some views suggest the market has entered a "super cycle" where demand continues to grow due to the explosive adoption of AI.

Meanwhile, local media reported that Kioxia, a NAND flash manufacturer competing for the top spot in market capitalization on the Japanese stock exchange, has set a goal to surpass the global leaders in NAND flash, Samsung Electronics and SK Hynix.

It was recently revealed that Kioxia CEO Hideo Hayasaka stated at a shareholders' meeting held on the 25th of last month, "We invented NAND flash, but we are not number one. I don't know how many years it will take, but we will reclaim the top position."

Nikkei noted that "Kioxia's counterattack has begun," but warned, "Even if it reaches the top tier in Japanese market capitalization, Samsung and SK Hynix of Korea boast enterprise values four times that of Kioxia. Kioxia faces a mountain of tasks, including strengthening relationships with major customers like NVIDIA, developing cutting-edge technology, and making bold capital investments."