Samsung Shares Rebound as Nvidia Comments Ease Worry Over Its HBM Tech

By Kwanwoo Jun

Samsung Electronics shares advanced Wednesday after comments from the chief executive of AI chip maker Nvidia soothed concerns about the South Korean tech giant's high-bandwidth-memory products.

Shares of the world's top memory-chip maker rose as much as 3.6% to 78,000 won ($56.75) in morning trade, regaining ground after recent losses and outperforming the benchmark Kospi's 0.9% gain.

The South Korean large-cap stock fell nearly 6% in April and more than 5% in May, hit by concerns that it is falling behind in the race to develop HBM products forming crucial parts of artificial-intelligence processors. The worries were fueled by media reports suggesting that Samsung HBM product samples had trouble passing Nvidia tests due to heat and power-consumption issues.

The bounce in Samsung's stock followed comments from Nvidia Chief Executive Jensen Huang overnight saying that the Korean electronics giant's HBM products didn't fail any qualification tests, and they just need additional work.

"We just have to do the engineering. It's just not done," Huang told reporters at a session during the Computex technology show in Taipei on Tuesday.

Huang's comments about the Samsung HBM products currently being tested by Nvidia were cited in multiple media reports, including from Bloomberg and Korea JoongAng Daily. Huang also said he was looking at having Samsung and U.S. chip maker Micron Technology become suppliers for Nvidia. Samsung's rival and the HBM-market leader in Korea, SK Hynix, already provides advanced AI chips to Nvidia.

Seoul-based Shinyoung Securities analyst Park Sang-wook said in a research note Wednesday that global HBM market conditions will turn in Samsung's favor as AI-fueled demand keeps growing in the coming years.

Global demand for HBM products is expected to outpace supply by 15% this year and by 11% for 2025, Park said.

Combined HBM output from SK Hynix and Micron won't be enough to meet demand, giving Samsung the opportunity to step in to fill the gap, the analyst said.

Shinyoung Securities kept a buy rating on Samsung with a KRW100,000 target prices.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

June 05, 2024 00:32 ET (04:32 GMT)

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