ANN/THE KOREA HERALD – Shares of Korean chipmakers Samsung Electronics and SK hynix dropped earlier this week after Nvidia’s stock took a sharp decline overnight.
Nvidia, the global leader in graphic processing units, faces increased volatility due to an ongoing antitrust probe and concerns over a potential collapse of the recent artificial intelligence (AI) boom.
As key suppliers of advanced AI chip components to Nvidia, experts suggest that South Korea’s top chipmakers are likely to experience share losses in the near future.
At the closing bell on Wednesday, Samsung shares slid 3.45 per cent, while SK hynix, the key supplier to Nvidia, suffered a fall of 8.02 per cent from the previous trading day.
On Tuesday, Nvidia shares fell 9.53 per cent in regular trading. Its share price further declined by two per cent in post-market trading, following a report that the United States Justice Department sent a subpoena to the chipmaker as part of an antitrust investigation.
According to Bloomberg, the Justice Department is looking into the GPU giant over concerns it is making it harder for its buyers to switch to other suppliers and penalises customers that do not exclusively use its AI chips.
In the wake of the AI boom, the GPU maker came to dominate over 90 per cent of the advanced AI chip market, and its sales have been more than doubling each quarter.
Nvidia maintains that its market dominance comes from the quality of its products, and that customers have chosen the solution that is best for them.
Korean chipmakers have also been benefiting from the growth of Nvidia, supplying the High Bandwidth Memory chip that is a crucial component to speed up the performance of Nvidia’s advanced GPUs. “Nvidia has the big role in creating the burgeoning AI market, and it takes a large portion of the demand for the High Bandwidth Memory chips the Korean companies are strong in,” said Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University, explaining it is “inevitable” for Korean chipmakers to be affected by the GPU-maker.
The recent decline will likely be temporary, since the rise in demand for advanced GPU products is evident in the market, Lee added.
While it is too early to predict the direction of the antitrust probe, Nvidia’s struggles would likely slow down the IT market overall, an industry official said.
