John Y. Campbell, a professor of economics at Harvard University, speaks during an exclusive interview with The Korea Times and its sister publication, the Hankook Ilbo, at the Korea Capital Market Institute in Seoul, Wednesday. Korea Times photo by Yun Gi-hun
Samsung Electronics and SK hynix have led Korea’s recent stock market rally on the back of surging global demand for advanced artificial intelligence (AI) chips, but the broader AI industry must ultimately prove it can translate technological promise into scalable and sustainable profit models for current lofty valuations to hold over the long term, according to a Harvard economist.
In a recent exclusive interview with The Korea Times and its sister publication, the Hankook Ilbo, at the Korea Capital Market Institute in Seoul, John Y. Campbell, a professor of economics at Harvard University, noted that earlier waves of the tech economy justified massive valuations because dominant platforms — Google in search, Amazon in e-commerce and Meta’s social media empire — captured highly lucrative markets through powerful network effects, effectively securing near-monopolistic positions.
The AI industry, however, may not follow the same trajectory, as relatively low switching costs and the rapid emergence of competing models raise uncertainty over whether sustainable market dominance can be established.
“We have competing models and it seems to be very easy to switch among them,” Campbell said, noting that AI firms may struggle to replicate the entrenched market control that once underpinned tech giants.
Unlike AI model developers whose valuations hinge heavily on future monetization, the current semiconductor rally pushing shares of the two Korean chip giants to record highs is grounded in more immediate, tangible conditions — hyperscalers’ soaring need for high-bandwidth memory (HBM) and aggressive data center expansion.
Geopolitical tensions are further strengthening Korea’s semiconductor competitiveness, Campbell noted, as countries and companies are increasingly seeking alternative chip supply sources outside Taiwan for strategic reasons.
“The Korean companies are in a good position to exploit that,” he said.
Still, there are growing warnings that valuations could come under pressure if investors become overly optimistic about the long-term growth potential. If major tech firms pull back on AI infrastructure spending, today’s breakneck expansion of chip production could trigger oversupply. At the same time, rising output from Chinese manufacturers may intensify competition, particularly in lower-end memory segments.
Campbell underscored that ultimately, the long-term performance of Korean tech stocks will depend not simply on AI-driven hype, but on whether companies can sustain their technological edge and deliver consistent earnings growth.
Source: Korea Times News
