00:02You're listening to AI Prism from Seoul Economic Daily.
00:30is squeezing fourth-quarter exporter earnings.
00:33Morgan Stanley sees Big Tech's free cash flow deficit
00:37hitting $540 billion next year, even as CapEx jumps 60%.
00:43And in Taiwan, Micron's workforce is walking out on October 22nd,
00:48demanding 15% of operating profit.
00:52It's Wednesday, October 21st.
00:55Here's why global investors are paying attention to Korea today.
00:58Korean equities are being pulled down by the same global forces worrying everyone else.
01:04A credit scare at AI cloud firm CoreWeave, doubts about memory chip profitability,
01:10and growing worries about Big Tech's cash burn.
01:13Both Samsung Electronics and SK Hynix fell more than 2.9% and 4.2% respectively,
01:21as investors questioned how long the memory chip boom can last,
01:25against rising competition from China.
01:27Meanwhile, sovereign bond markets in the U.S. and France are flashing fiscal stress signals
01:34that could complicate central bank policy worldwide.
01:38Here's what the numbers show.
01:40The COSPI dropped 215.27 points, or 3.73%,
01:46to close at $5,552.74 on October 20th.
01:52Brokerages issued 210 target price downgrades, against just 50 upgrades over the past week,
01:59four times more cuts than raises.
02:01Investor deposits on the sidelines fell to $92.1 trillion, or roughly $70 billion,
02:08the lowest level in nine months.
02:11Samsung Electronics fell 2.98%, and SK Hynix dropped 4.23% on the same day.
02:19Morgan Stanley projects combined hyperscaler and neocloud capex at $1.58 trillion next year,
02:26up 60%, while free cash flow deficits reached $540 billion, including leases.
02:34A W.S. executives privately acknowledged the unit's free cash flow deficit could persist for two more years.
02:41Micron's Taiwan workforce, representing over 80% of local staff,
02:45votes to strike on October 22nd at a site producing roughly half the company's global chip output.
02:52The U.S. 30-year Treasury yield hit 5.31% this month, the highest since 2007,
02:59while France's 10-year yield climbed to 4.925%, a 20-year high.
03:06So what does this mean for global investors watching Korea?
03:09Earlier, we said big tech's free cash flow deficit was ballooning even as capex surges.
03:15Here's what that actually means for you.
03:18Korea's memory chip story is now hostage to whether that spending actually converts into chip orders,
03:24not just headlines about AI ambition.
03:27With bond yields rising in both Washington and Paris,
03:30hedging costs for Korea exposure are likely to stay elevated until fiscal risk calms down.
03:36Meta's Q3 earnings release on October 21st.
03:40A read on whether AI Capex is translating into actual revenue,
03:44the outcome of Micron's Taiwan strike vote on October 22nd,
03:48and any production impact on HBM supply.
03:51Whether Cosby holds the 5,100 to 5,340 range analysts flagged as the next technical floor.
03:59That's today's AI prism, global investors.
04:02This episode was produced with AI assistants based on Seoul Economic Daily reporting
04:08and reviewed by a human editor.
04:11AI prism is a Juan Ifra award-winning series.
04:14We'll be back tomorrow.
04:16You've been listening to AI prism from Seoul Economic Daily.
