[DiaryPoint] By Kim Jeong-hoon — As concerns about data center regulation spread after the U.S. midterm elections, the KOSPI closed at 5,059.69 on the 6th, down 6.02% from the previous session. Samsung Electronics fell 6.35% to 188,700 won, while SK hynix dropped 10.44% to 1,132,000 won.
The main concern is less a blanket federal shutdown than state and local rules governing permits, power grids and water use. Even if Democrats take control of both chambers of Congress, the president retains veto power. Efforts to slow data center construction could instead emerge through state policies and local approval processes. Lee Kyung-min, a researcher at Daishin Securities, said concerns about tighter regulation in Congress had spread across the AI value chain, including semiconductors.
Texas pauses state permits until grid audit is complete
In Texas, Republican Gov. Greg Abbott directed the state environmental quality commission to pause data center-related permits until an audit of ERCOT, the state’s grid operator, is completed. The directive was issued on September 21. It is a state-level measure to examine grid reliability and the effects of water use. Gina Hinojosa, the Democratic governor-elect, pledged to halt permits for new projects until the legislature passes measures to protect residents.
In a July announcement, Hinojosa said data center operators should pay for grid upgrades and transmission costs and demonstrate that household electricity and water bills will not rise. Georgia Gov.-elect Keisha Lance Bottoms also pledged a temporary pause on new data center development. Such policies can delay project approvals and access to power and water. The costs borne by developers and any effect on household bills will depend on each state’s detailed rules.
For chipmakers, watch server deployment timelines—not just order cancellations
The signal most directly relevant to South Korea’s memory makers is how quickly data center construction plans translate into server purchases and memory orders. If customers postpone server deployments, deliveries and revenue recognition for HBM, server DRAM and enterprise SSDs could also be pushed back. “If data center construction is not halted across the board, the impact on the semiconductor cycle and earnings is likely to be limited,” Lee of Daishin Securities said.
Power equipment makers must be assessed in light of both data center project schedules and grid investment. In July, HD Hyundai Electric signed a framework agreement worth up to 1.1212 trillion won with a global tech company for power and distribution equipment. Actual orders will follow construction schedules. Data centers account for about 6.3% of the company’s new orders this year, while 51 U.S. investor-owned electric utilities have planned at least $1.4 trillion in capital spending through 2030.
Investors should track, in order, whether state permit pauses lead to actual approval delays, whether major tech customers change server investment and ordering schedules, and whether individual power equipment orders are postponed. Rules that shift more grid and water costs to data center operators align with efforts to keep household bills down, but depending on how they are applied, they could also affect construction timelines and the expansion of infrastructure for AI services. The results of Texas’s audit and discussions in the next state legislative session are the next policy milestones.