SK Hynix shares hit 25-year high, Samsung also surges as chipmakers partner with OpenAI

Samsung Electronics and SK Hynix, two South Korean chip heavyweights, saw a significant surge in their stock prices on Thursday following their partnership with artificial intelligence major OpenAI as part of the U.S. firm’s Stargate initiative. Samsung shares reached their highest level since January 2021, closing 3.5% higher, while SK Hynix stock soared nearly 10% to levels not seen since 2000.

According to a statement from OpenAI, the partnership aims to increase the supply of advanced memory chips essential for next-generation AI and expand data center capacity in Korea. The collaboration between OpenAI, Samsung, and SK Hynix will focus on scaling up production of advanced memory chips crucial for powering AI models.

The announcement coincided with a meeting between OpenAI CEO Sam Altman and South Korean President Lee Jae Myung in Seoul, as well as discussions with top leaders at Samsung and SK Hynix. OpenAI has also inked agreements to explore the development of next-generation AI data centers in South Korea with various stakeholders, including the Korean Ministry of Science and ICT, SK Telecom, and Samsung subsidiaries.

Recently, SK Hynix announced its readiness to mass-produce next-generation high-bandwidth memory (HBM) chips, solidifying its position in the AI value chain. HBM is a type of memory used in chipsets for artificial intelligence computing, including in chips from global AI giant Nvidia – a significant client of SK Hynix.

HBM4 chips are expected to be the primary AI memory chip needed for Nvidia’s upcoming Rubin architecture, a more potent AI chip for global data centers. SK Hynix has been a key chip supplier to Nvidia, while Samsung has reportedly been working to get its HBM4 chips certified by Nvidia.

Traditionally, Samsung has been the market leader in memory, but its position has been challenged by SK Hynix’s dominance in the HBM space. A report from Counterpoint Research in July revealed that SK Hynix had caught up with Samsung’s memory revenues in the second quarter, with both companies now competing for the top spot in the global memory market.

Samsung’s second-quarter earnings fell short of expectations, with profits from its chip business declining by almost 94% year-on-year. However, Chief Financial Officer Soon-cheol Park expressed optimism about a rebound in the company’s performance in the second half of the year.

The partnership between OpenAI, Samsung, and SK Hynix signals a significant step towards advancing AI capabilities through cutting-edge memory chip technologies. The collaboration is poised to drive innovation and strengthen the position of South Korean firms in the global AI landscape.