Korea: The Memory Super-Cycle Has Further to Run

Starting with Korea, due to the ongoing memory shortage as AI demand outstrips supply, earnings expectations for 2026/2027 have seen an incredible 183%/243% positive revision since the beginning of the year. This has been the driving force for the impressive market returns year-to-date. Understandably, investors are questioning the sustainability of these earnings, and the valuation multiple for Korea has declined by over 50% to just a 4x forward P/E.

We came into the year positive on Korean equities, and this remains one of our preferred regions. We continue to be of the view that memory supply and demand will likely stay tight at least into 2028 and potentially beyond. The…