Post-Midterm Elections in the U.S. See Rise of Anti-Data Center Forces, Asian AI Chip Stocks Under Pressure

On November 4, the Democratic Party won the midterm elections in the United States, with several candidates opposing the expansion of data centers elected as governors. The market is concerned that investment in AI infrastructure in the U.S. will slow down. Asian chip stocks are under pressure, with companies like Samsung Electronics and SK Hynix facing risks from affected demand for server DRAM and high bandwidth memory (HBM). The opposition to data centers mainly focuses on issues such as noise, water consumption, energy consumption, and increased electricity costs for residents. The market fears that local governments may tighten project approvals under the pretext of power supply, environmental protection, and AI safety, leading to delays in the construction of new data centers. Analysts believe that regulation may not necessarily lead to a reduction in investment scale, as tech companies might turn to building their own power and supporting infrastructure. The election results have varying impacts on South Korean companies; the Democratic Party's control of Congress may counterbalance the Trump administration's efforts to cut subsidies under the CHIPS and Science Act, benefiting companies like Samsung that invest in the U.S.; the clean energy tax credit policy is expected to be restored, which may benefit solar companies like Hanwha Solutions. It is anticipated that there will be little significant easing of automotive tariffs, and the Korea-U.S. shipbuilding cooperation framework is likely to continue.

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