For the South Korean company Samsung Electronics, which not only remains the largest manufacturer of memory chips, but also claims to receive subsidies in the United States if it builds new plants in Texas, Donald Trump’s victory in the presidential election is a controversial factor, and while the manufacturer’s shares are reacting for this event, decreasing to a four-year minimum.
Image Source: Samsung Electronics
Being one of the largest players in the semiconductor market, Samsung Electronics is showing one of the worst dynamics on the stock market this year. Firstly, the company is inferior to its smaller competitor SK hynix in the HBM memory market, which is in demand during the boom in artificial intelligence systems. Secondly, Samsung has no way of certifying its HBM3E memory for use with Nvidia’s compute accelerators, which dominate the market. Thirdly, Samsung is far behind TSMC in the chip contract manufacturing market, and Intel is also increasingly demonstrating its ambitions in this area.
As Reuters explains, Samsung is more dependent on the sale of its memory chips to Chinese customers than SK hynix, and therefore the intensification of the so-called “trade war” between the United States and China, which could be facilitated by Trump’s return to the White House, will hit Samsung’s business harder. Increasing import tariffs on electronic devices equipped with Asian-made memory could reduce demand for them in the US market, which would impact Samsung’s business. Moreover, it produces a significant part of its memory chips in China.
In addition, South Korean President Yoon Suk Yeol recently said that Chinese chip manufacturers may, in response to Trump’s actions, reduce selling prices for their products, and this will undermine the business of Korean memory suppliers. Since the beginning of the year, Samsung Electronics shares have already lost 34% in price, demonstrating one of the worst dynamics in more than two decades. At the same time, shares of rival SK hynix have strengthened in price by 32% since the beginning of the year, and Nvidia securities have generally risen in price three times. At the time of preparing the news for publication, the share price of Samsung Electronics did not exceed 50,600 Korean won. Since mid-July, these securities have been losing price almost continuously with only minor rebounds.