Samsung, SK Hynix rally tracking AI hype, strong Micron earnings

Investing.com-- South Korean memory chip makers Samsung Electronics and SK Hynix staged a strong rally on Thursday, amid growing optimism over demand from the artificial intelligence industry- a trend that was also reflected in strong earnings from U.S. peer Micron. 

Samsung, SK Hynix rally on AI hype

Samsung Electronics (KS:005930) surged 2.6%, extending a strong rally from the prior session after media reports showed AI darling NVIDIA Corporation (NASDAQ:NVDA) was testing high-bandwith memory (HBM) chips from the electronics conglomerate. 

Samsung shares were close to a three-month high. The firm recently announced that it will begin developing advanced HBM chips, which are a key component of AI development, given that they help meet the high memory and computing demands of large-language program models. 

Smaller rival SK Hynix Inc (KS:000660) surged 8.5% on Thursday, rebounding from a series of steep losses as Samsung’s entry into the advanced HBM market presented more competition for the relatively smaller firm.

But SK Hynix still has an edge over its peers, in that it is currently the only producer of the next-generation HBM3E chips, which are set to power Nvidia’s recently announced Blackwell line of AI chips. SK Hynix is the sole supplier of HBM chips to Nvidia so far. 

Nvidia’s unveiling of the new chipset was a key driver of gains in chipmaking stocks this week, especially as the AI firm said it will begin shipping the new chips in 2024. 

Samsung and SK Hynix were the two biggest boosts to South Korea’s benchmark KOSPI index, which jumped 2.4% to 2,753.46 points- its highest level since April 2022. 

Strong Micron earnings also buoy memory chip makers 

Stronger-than-expected quarterly earnings from U.S. memory chip maker Micron Technology Inc (NASDAQ:MU) also factored into gains in South Korea. 

Micron’s shares surged as much as 18% in aftermarket trade, after the firm posted a surprise quarterly profit, citing increased demand from AI development. 

The firm also forecast much stronger revenue growth on an expected boom in AI development. Micron was also recently tapped by Nvidia to supply HBM chips.