AI Chip Rally Continues, Gold Tops $4,177

Market Overview

U.S. equity markets were closed Monday in observance of the Independence Day holiday. However, futures markets remained active, with S&P 500 futures rising 0.4% and Nasdaq 100 futures gaining 1.2%.

The AI semiconductor supply chain continued to strengthen across the board. Samsung Electronics' foundry business secured major contracts from Tesla, Meta, and Anthropic, pushing its order backlog to approximately KRW 50 trillion. Meanwhile, Micron Technology announced a roughly $9.3 billion investment to expand its Hiroshima facility in Japan for the production of advanced memory products, including High Bandwidth Memory (HBM). Shipments are expected to begin in the summer of 2028, supported by Japanese government subsidies of up to JPY 500 billion. Separately, UBS raised its 12-month price target for SK Hynix to KRW 3.2 million.

Foxconn reported June revenue of TWD 821.76 billion, up 52.11% year-over-year. Second-quarter revenue reached TWD 2.51 trillion, representing a 39.83% annual increase. The company expects AI server rack shipments to continue accelerating in the third quarter. Meanwhile, Fii (Foxconn Industrial Internet) became the only A-share listed company in Shenzhen with a market capitalization exceeding RMB 1 trillion.

Precious metals extended their rally. Spot gold rose 1.3% to $4,176.94 per ounce, bringing weekly gains to 2.2%. Spot silver advanced 2.5% to $62.42 per ounce and finished the week up 5.5%.

Cryptocurrencies also moved higher. Bitcoin climbed above $62,000 intraday, gaining more than 2% on the day, while Ethereum posted weekly gains exceeding 10%.

In China, the Shanghai Composite Index rose 0.37% to 4,043.64, while the Shenzhen Component Index gained 0.64% to 15,597.51. In Europe, the STOXX Europe 600 Index advanced 0.68% to 652.77, marking its second consecutive record close and delivering a weekly gain of 2.66%.

Brent crude oil settled at $72.12 per barrel, extending its losing streak to four consecutive weeks, the longest decline in nearly two years. OPEC+ agreed to increase August production quotas by 188,000 barrels per day.

Key Themes to WatchPricing Power Shifts Across the AI Semiconductor Supply Chain

Samsung's success in securing major contracts from Tesla, Meta, and Anthropic, combined with Micron's aggressive HBM expansion in Japan, underscores the continued migration of AI-driven demand toward advanced memory and leading-edge manufacturing technologies.

With Samsung's backlog reaching approximately KRW 50 trillion, production capacity and delivery timelines have become increasingly scarce resources. Companies controlling advanced process nodes and HBM capacity are emerging as the primary beneficiaries of this cycle, gaining significant pricing power as customers compete for supply.

Japan's decision to provide up to JPY 500 billion in subsidies for Micron's expansion further highlights the growing recognition of advanced memory production as a strategic national asset.

Foxconn's Results Reinforce Strong AI Infrastructure Demand

Foxconn's June revenue growth of more than 50% year-over-year and nearly 40% growth for the second quarter provide additional confirmation that AI infrastructure spending remains robust. AI server rack shipments continue to serve as a key growth driver, with management expecting further volume expansion in the third quarter.

The strength seen across hardware segments, from chips and memory to complete server systems, suggests that the AI infrastructure investment cycle remains intact. However, investors should continue monitoring whether growth rates can be sustained against increasingly challenging comparisons, as well as potential constraints related to power availability, cooling infrastructure, and overall deployment capacity.

Key Events to Watch

• The People's Bank of China conducts RMB 1 trillion in outright reverse repurchase operations.

• New A-share trading rules take effect, raising daily price movement limits for Main Board ST-designated stocks to 10%.

• Release of U.S. June ISM Services PMI and Eurozone May Producer Price Index (PPI).

• Federal Reserve Governor Christopher Waller delivers remarks.

• SpaceX is set to be added to the Nasdaq-100 Index.