The AI arms race is heating up! Meta (META.US) sets a new record with a massive investment of 135 billion US dollars, leading to a "golden age" for hardware suppliers like Samsung Electronics.

Notice that the world's largest tech companies show no signs of slowing down their spending on AI, and this record-breaking wave is driving the development of hardware suppliers like Samsung Electronics and SK Hynix. Despite doubts about the sustainability of the demand for artificial intelligence and whether it can support such massive capital expenditure. Just Meta (META.US) alone disclosed an ambitious spending plan of up to $135 billion this year - one of the largest planned expenditures in the business sector. Its suppliers have also responded accordingly: on Thursday, SK Hynix announced plans to "significantly increase" capital expenditure, and Samsung also said it will increase investment in storage chip production capacity. Meanwhile, as long as companies can demonstrate growth, investors will continue to reward this ambition. After Microsoft Corporation (MSFT.US) disclosed a slowdown in cloud computing service growth, its stock price fell by 6.1%, while Meta rose by 6.6%. This week, a series of industry giants' financial reports emphasized how strong the market demand for AI hardware is and how this momentum is likely to continue into 2026. Meta, Microsoft Corporation, as well as Amazon.com, Inc. (AMZN.US) and Alphabet (GOOGL.US), and other giant cloud service providers are driving a global wave of chip, server, and computer acquisitions, igniting enthusiasm among hardware suppliers worldwide, especially in Asia. Samsung and SK Hynix are the two major manufacturers of the NVIDIA Corporation's core AI accelerators and data center server storage chips, with both companies seeing profits grow several times over. ASML (ASML.US) as the sole supplier of advanced semiconductor lithography machines, also far exceeded expectations. Hargreaves Lansdown analyst Matt Britzmann said, "The real headline here is the 'continual rise' in capital expenditure. As investors digest these aggressive investment plans, it is not surprising to see stock price reactions cool," he said regarding Meta. At the same time, this huge demand is exacerbating the global chip supply-demand imbalance, threatening industries ranging from smartphones and electronics to automotive manufacturing. Although the demand for NVIDIA Corporation and AMD (AMD.US) accelerators needed to develop and operate AI has long been outstripping supply, investors are increasingly concerned that basic storage chips may also face similar shortages. Elon Musk recently said on a podcast with X Prize Foundation founder Peter Diamandis that semiconductor supply will be a major bottleneck for companies like Tesla, Inc. (TSLA.US) in their growth, necessitating the establishment of "Tesla, Inc. TeraFab" - a factory capable of manufacturing logic and storage chips and providing packaging. Musk said, "If we don't build a fab, we will hit a 'chip wall.' We have two choices: either hit the wall, or build our own factory." Storage chip manufacturers are shifting their production lines towards lucrative high-bandwidth memory (HBM) to meet the demand of AI data centers. This shift, which requires about three times the wafer capacity to produce the same capacity of HBM as standard DRAM, has reduced supply in the consumer electronics industry. This is threatening personal computer manufacturers and small electronics companies, potentially leading to double-digit price increases. However, concerns about demand for AI terminals still exist. Microsoft Corporation's capital expenditure this quarter increased by 66%, exceeding expectations, but its Azure cloud computing division revenue grew by 38% - one percentage point slower than in the previous three months. On the other hand, Meta CEO Mark Zuckerberg discussed the "major AI acceleration" that the tech industry has been brewing for over a year. He said, "I expect our first models to be great, but more importantly, we will demonstrate the rapid growth trajectory we are on." During the Seoul trading session on Thursday, Samsung's stock fell by about 0.4%, despite the company's plans to begin shipping its next-generation high-bandwidth memory HBM4 in February - a key step in catching up with SK Hynix in this lucrative area. SK Hynix's stock rose by about 2%. Samsung's chip division reported a profit growth of five times, well above analysts' average expectations. The company also announced a buyback of 35.7 trillion Korean won in stocks, and declared a special dividend payout, bringing its total dividend for the fourth quarter to 37.5 trillion Korean won. Samsung's chip profit soars due to surging demand for memory In Asia, the focus is on the battle for leadership in the next-generation HBM4, which will be integrated with NVIDIA Corporation's upcoming flagship Rubin processor. Samsung is about to receive certification from NVIDIA Corporation for its latest version of AI storage chips. The AI construction boom also helps support Samsung's contract manufacturing business, which is competing with industry leader Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Executives say Samsung's contract chip manufacturing unit expects 130% growth in 2026 for 2-nanometer orders and is actively discussing with customers in the US and China.