South Korean Chip Shares Rally as AI Frenzy Persists
By Kwanwoo Jun
South Korean semiconductor shares rallied Tuesday as investors continued to bet on strong demand for artificial-intelligence chips in the persisting new technology boom.
Shares of memory-chip maker SK Hynix and chip-packaging equipment supplier Hanmi Semiconductor finished up 4.3% and 16%, respectively, outperforming the local stock benchmark Kospi's 0.7% gain.
SK Hynix tracked rival Micron Technology's gains overnight on Wall Street, which were sparked by a surprise profit turnaround last week and continued on the AI tailwinds.
SK Hynix and Micron are the leading suppliers of high-bandwidth-memory chips, including the advanced HBM3E product, for AI-chip giant Nvidia.
Analysts say the AI boom is fueling demand for powerful computing chips like HBM products as running AI software requires huge memory capacity.
Markets have increasingly been optimistic about SK Hynix's earnings prospects, with Daiwa Capital analysts recently raising their 2024 earnings-per-share forecast for the company by 41%, citing higher chip prices and bigger contributions from premium HBM3E products.
Hanmi Semiconductor rallied alongside SK Hynix, as Hanmi supplies SK Hynix with advanced HBM packaging equipment like TSV-TC bonders.
Hanmi last week signed a KRW21.48 billion supply deal with SK Hynix--the latest in a series of recent contract wins totaling around KRW200 billion.
Hyundai Motor Securities analysts said in a recent research note that Hanmi looks poised to benefit from strong HBM demand in the U.S. They said the U.S. push to establish an onshore HBM supply chain--which involves SK Hynix, Taiwan's TSMC and Nvidia--in the next five years is a growth opportunity for Hanmi.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
March 26, 2024 04:10 ET (08:10 GMT)
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