Samsung Stock: A Blazing Opportunity

● Oil Price Plunge- Recession Alarm

An Overview of Saudi Arabia’s Low Oil Price Strategy, the Global Oil Price War, and Economic Prospects

1. Yamani’s Philosophy, Saudi Energy Minister

Saudi Energy Minister Yamani compared the oil era to the Stone Age, arguing that just as the Bronze Age replaced the Stone Age, the development of alternative energy sources threatens the demand for crude oil.
In other words, he believes the oil era will end not due to a shortage of crude oil, but because of the emergence of better technologies.
From this perspective, Saudi Arabia has chosen a low oil price policy rather than a high oil price policy.

2. The Oil Price Plunge and the Shale Revolution of Late 2014 to 2015

As Saudi Arabia decided on a sudden increase in production instead of a production cut, the WTI crude oil price plummeted by more than 70%, from $100 to $25.
This event occurred in conjunction with the shale revolution in the United States, where the U.S. rapidly increased its daily production from 3 million barrels to 6 million barrels, overwhelming the production of Saudi Arabia and Russia (8-9 million barrels).

3. Impasse in OPEC Plus Production Cuts

Oil-producing countries, including Saudi Arabia and Russia, gathered for an OPEC Plus meeting to discuss production cuts.
However, each country was reluctant to participate in production cuts due to individual financial problems, and eventually, some countries did not implement production cuts, and even threats of increased production emerged.
This situation acts as an anxiety factor for oil prices.

4. Impact on the Global Economy, Prices, and Investment Strategies

A drop in oil prices has a short-term effect of stabilizing prices, but if it falls below $60, it amplifies concerns about an economic recession and has a major impact on countries with high fiscal dependence (Iraq, Russia, Iran, etc.).
As a result, it affects stock prices and investment sentiment, and careful judgment is required regarding the possibility of economic recession and stagflation.

5. The Oil of the 21st Century: Data and Technological Innovation

If crude oil was the center of the economy in the past, data and technological innovation are expected to replace the role of new crude oil in the future.
As oil prices stabilize, expectations of the Fed’s interest rate policy and stock price recovery are formed, but a situation exists where economic recession and non-participation in production cuts exist simultaneously.

Summary

From Saudi Minister Yamani’s low oil price policy to the oil price plunge of 2014-2015, the shale revolution, OPEC Plus production cut conflicts, the impact of falling oil prices on the economy, prices, and investment strategies, and the possibility that data and technological innovation will replace the role of future crude oil, this article summarizes the overall global economic outlook and key investment considerations. It includes the key words: economic outlook, Saudi Arabia, oil prices, OPEC, and investment strategy.

Saudi Energy Minister Yamani’s low oil price strategy, which explained the end of the oil era with the development of alternative energy, the oil price plunge that started at the end of 2014, the surge in production due to the advent of the U.S. shale revolution, and the failure of the OPEC Plus production cut operation and the threat of increased production are analyzed in chronological order for their impact on the global economy and investment strategy. A forecast is presented that the oil of the 21st century economy will be led by data and technological innovation.

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– [그냥효] 원유 가격이 이 밑으로 가면 침체의 강력한 시그널

● Semiconductor Irrelevance, Golden Opportunity

How to Properly Grasp Semiconductor Cycles, Technological Innovations, and Investment Timing

1. Investment Sentiment and Cycle Changes

Investment sentiment feels completely dead right now. Only those who have diligently studied semiconductors are consistently holding on, and the reality is that new investors have almost no interest. This semiconductor cycle has atypical aspects that differ from the past. It’s similar to a trending dessert that quickly flares up and then quickly dies down. Investors should remember the principle of studying and taking courses when semiconductor stocks are at their bottom.

2. Front-End and Back-End Processes, Corporate Strategies, and Investment Points

Semiconductor industry lectures will cover front-end and back-end processes in more detail. Front-end companies were previously neglected and recorded low valuations, but some companies have additional growth potential (plus alpha). Investors should meticulously check for additional growth drivers such as cost reduction or new product mass production, in addition to the company’s main business.

3. DRAM and HBM Markets, Supply and Demand Issues

The latest DRAMs, like DDR5, are showing signs of rebounding after hitting their price bottom. Older DDRs are not expected to decline in price easily thanks to supply reduction effects. HBM demand has been explosive due to increased data center and AI investments, but it’s important to pay attention to how supply expansion and companies’ large-scale facility investments will affect future demand.

4. Differentiation of Technology Methods and Performance Competition

In semiconductor chip manufacturing, front-end and back-end processes, especially method differences, play an important role. Hynix shows stable heat dissipation and improved yield with its bonding method. Samsung and others have been using methods such as double-sided tape, but are considering switching to new methods such as hybrid bonding as they stack 16 or more layers. Each company’s technological competitiveness and differences in production methods are expected to greatly affect future market share and investment attractiveness.

5. Data Center Investment and Artificial Intelligence Demand Outlook

Data center-related companies have been pursuing large-scale investments at regular intervals, similar to past facility investment patterns. Recently, there have been signs of weakened investment sentiment and adjustments in the speed of facility investment. Semiconductor demand due to the expansion of artificial intelligence services will certainly increase, but from an investor’s perspective, one should always keep in mind the possibility of a slower-than-expected rebound.

6. Investment Strategy and the Importance of Continuous Learning

In cyclical industries like semiconductors, it’s important to continuously study when others are not interested. You should have a learning period of six months or more in preparation for when stock prices have fallen enough. It is a successful investment point to thoroughly analyze the latest technologies, methods, and companies’ additional growth drivers, and to approach with a conservative investment strategy.

< Summary >

In a semiconductor cycle with depressed investment sentiment, the undervaluation and additional growth drivers of front-end companies, the supply and demand issues of the latest DDR5 and HBM, and the differences in process competitiveness of each company are important technical points. Even though increased demand for data centers and AI is expected, the importance of investment timing and basic study is emphasized. Core content related to economy, semiconductors, investment, technology, and cycles must be thoroughly understood.

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