"If You Bought Samsung Electronics and SK hynix, Never Sell"... The Warning From the Man Managing $1.8 Billion

[Financial News] Mohnish Pabrai, a world-renowned value investor, praised the investment appeal of Samsung Electronics and SK hynix, saying their monopoly-like value is highly attractive.

On the 22nd, the YouTube channel 'Knowledge Inside,' which has 3.8 million subscribers, uploaded an interview with Pabrai, the head of the Pabrai Fund, under the title, 'One Treasure I Gained from Having Lunch with Warren Buffett Worth 700 Million Won.'
Pabrai, who manages $1.4 billion in assets and was influenced by Warren Buffett's value-investing philosophy, expressed strong confidence in the monopoly position and future value of Korean semiconductor companies. In the video, he emphasized that "the memory semiconductor industry is a very solid business."
He said he had previously invested in SK hynix and added, "These were companies I should have held forever, but unfortunately I broke my own rule and sold them." He advised, "If you already own these companies, which supply the most certain 'pickaxes' in the semiconductor gold rush, never sell."
Pabrai's high regard for the two companies stems from the strong barriers to entry in the memory semiconductor industry. He said, "In the past, the memory market was a brutal chicken game, but now only three players remain: Samsung Electronics, SK hynix, and Micron." He argued that "it is now nearly impossible for a fourth company to enter this market."
He added that a Micron executive told him, "For a new competitor to enter this market, there are countless patent barriers, the need to secure key engineers and recruit management, and because of complex advanced manufacturing processes, it would take at least 10 to 20 years just to build a new semiconductor fab."

He also stressed, "If you have already bought Samsung Electronics and SK hynix, never sell," and advised that "the boom has only just begun." However, he warned that Korea's shrinking population could become a major headwind for the KOSPI, saying, "A long-term population decline will reduce the country's Gross Domestic Product (GDP) growth rate, and that will inevitably have a negative impact on the stock market."
Pabrai noted, "For countries with declining populations like Korea and Japan, the only way to grow GDP to some extent is to become export powerhouses." He added, "Korea is indeed an export powerhouse, but trade barriers such as tariffs and rising labor costs caused by population decline are major challenges."
bng@fnnews.com Kim Hee-sun Reporter