First-ever South Korea’s semiconductor powerhouses outstripped China’s two most iconic internet firms in
Historical Shift in Asia’s Tech Landscape
Asia’s technology order is undergoing a transformation. For much of the past decade, Chinese internet giants, especially Alibaba Group and Tencent Holdings, stood as symbols of the region’s tech dominance, boasting massive user ecosystems, cloud expansion, and sprawling digital platforms. But in early February 2026, a new milestone was reached: the combined market valuation of South Korea’s Samsung Electronics and SK Hynix, near US$1.14 trillion, eclipsed that of Alibaba and Tencent for the first time.
This shift reflects an evolving narrative in which AI-driven infrastructure, especially the memory chips that power data centers and generative AI workloads, has become the foundation of market value creation. It is no longer only software or services that capture investor imagination, but the hardware underpinnings that make AI possible. This moment offers a rich lens to explore broader strategic, economic, and geopolitical changes underway in the global tech industry.
Numbers That Changed Narrative
According to South Korean financial reports and market tracking services, Samsung Electronics and SK Hynix have seen their combined market capitalization rise to around US$1.11–1.14 trillion, surpassing the aggregate market cap of Chinese tech giants Alibaba and Tencent, which together hovered around US$1.54 trillion but have lagged due to slower stock growth.
Key dynamics driving this shift include:
- Stock Surge: Samsung’s share price climbed roughly 34% year-to-date, while SK Hynix jumped around 37%, compared with more modest gains for Alibaba (about +14%) and flat performance for Tencent.
- AI-Driven Demand: Investors are increasingly betting on companies supplying critical components for AI infrastructure, especially memory chips integral to AI accelerators and data centers.
This rebalancing underscores that market valuation, often seen historically as a proxy for tech leadership, is now being shaped by AI hardware demand, not just platform scale.
Memory Chip Super Cycle: Heart of Shift
The rise of Samsung and SK Hynix is rooted in a broader structural evolution within the semiconductor industry. Memory chips, once cyclical “commodity” products, have turned into high-value infrastructure assets because of the unique demands of AI.
Unlike consumer chips or processors used in PCs and phones, AI workloads require massive amounts of high-bandwidth memory (HBM) and advanced DRAM. These chips feed data to AI accelerators at blazing speeds, enabling models like large language systems and generative AI to compute efficiently.
Market research indicates that this demand has triggered a global memory supply shortage from 2024 through 2026, driven by capacity being reallocated to HBM and other AI-centric memory types.
South Korea’s Strategic Advantage
South Korea, home to Samsung and SK Hynix, dominates the global memory ecosystem:
- Samsung and SK Hynix together control over 90% of the global HBM market, the most lucrative segment in AI memory.
- Both firms have significantly expanded production and pricing power as memory prices have surged due to tight supply and strong enterprise demand.
Samsung’s memory business now accounts for the lion’s share of its profits, with recent quarters showing dramatic year-on-year growth driven by AI memory sales. Meanwhile, SK Hynix’s specialization in HBM3 and HBM4 memory, critical for Nvidia’s AI GPUs, has propelled its own growth, sometimes even outpacing Samsung in profit margins and valuation momentum within the memory segment.
Alibaba and Tencent: Platform Dominance Meets Infrastructure Reality
For years, Alibaba and Tencent were Asia’s tech icons, driven largely by consumer platforms, e-commerce ecosystems, and digital services:
- Alibaba built a sprawling empire spanning retail, cloud computing, logistics, and AI services. Its cloud unit alone captured a significant share of China’s AI cloud market.
- Tencent anchored its valuation in social platforms (WeChat), gaming revenues, and advertising.
Yet despite continued growth in their respective sectors, Alibaba and Tencent have not been major direct suppliers of the physical hardware fueling the AI boom. Cloud services and AI platforms still depend heavily on external chipmakers and memory suppliers, often based in South Korea, Taiwan, and the US.
Investors, increasingly attuned to where real infrastructure value is captured, have rewarded the memory suppliers whose products sit at the core of AI data center stacks, shifting capital flows away from platform valuations alone toward the architecture that underpins next-generation computing.
AI’s Insatiable Memory Appetite
AI models are not only becoming larger; they require ever more memory to process data:
- The shift toward memory-heavy AI workloads, such as deep learning training and inference, means HBM and advanced DRAM chips are in greater demand than ever before.
- Industry forecasts suggest that as AI workloads grow, memory chips will account for increasing portions of data center component costs and margins.
This has triggered what many analysts call a “memory super cycle”, a period of sustained high pricing, tight supply, and exceptional profitability for memory manufacturers.
In this new cycle:
- HBM production commands higher margins than traditional DRAM or NAND flash.
- Memory shortages are persisting through 2026 and are expected to continue to at least 2027 or beyond as production technologies struggle to keep pace.
The result? A structural shift where memory makers capture disproportionate economic value relative to traditional application software or consumer internet companies.
Investment Behavior and Geopolitical Implications
The valuation flip has broader implications:
Investor Sentiment
Institutional investors now view AI infrastructure suppliers as core long-term holds, reallocating portfolios from high-growth software to hardware enablers of AI. In particular:
- Samsung and SK Hynix have become anchor stocks in Asia tech indices.
- Global funds are increasing allocations toward chip and memory supply chains rather than pure play internet services.
Analysts note that this is not a simple cyclical rally but a reassessment of structural winners in the AI era.
Geopolitical Balance
China’s tech sector, long symbolized by Alibaba and Tencent, still wields immense influence through cloud services, e-commerce, and domestic AI ecosystems. Yet the pivot toward infrastructure manufacturing highlights another reality:
- South Korea’s memory production remains deeply embedded in global AI supply chains.
- Chinese efforts to boost domestic AI chipmaking are ongoing, but breakthroughs in cutting-edge memory production remain elusive.
This dynamic reflects a shift in where technological leverage lies, moving from platform user bases to physical infrastructure that powers the algorithms and services themselves.
Challenges Ahead: Supply Constraints and strategic Risks
Despite their strong footing, Samsung and SK Hynix face challenges:
Supply Crunch
Both companies warn of ongoing memory shortages as AI demand outpaces production capacity, a trend expected to continue well into 2027.
Pricing Pressures
Higher memory prices create headwinds for consumer electronics and could eventually temper demand if costs for AI deployment climb too rapidly.
Geopolitical Trade Uncertainty
Export controls, trade tensions, and investment restrictions, particularly involving China, may affect the global redistribution of supply chains for chips and memory components.
Pivotal Moment in Tech Evolution
The overtaking of Alibaba and Tencent in combined market capitalization by Samsung Electronics and SK Hynix is more than a statistical milestone. It signals a fundamental reorientation of value creation in the technology sector, where AI infrastructure and memory supply chains have become central to investor and strategic priorities.
As the world transitions from software dominance to an era where hardware underpins AI’s exponential rise, the memory makers have emerged as the new guardians of technological growth. What this means for Asia’s tech geopolitics, global innovation networks, and future investment flows is still unfolding, but one thing is clear: the era of AI infrastructure supremacy has arrived.
