Latest news with #SKHynix
Business Recorder
10 hours ago
- Business
- Business Recorder
South Korean shares hit four-year high on US trade deal hopes
SEOUL: Round-up of South Korean financial markets: South Korean shares climbed on Wednesday to their highest level in nearly four years, led by major exporters, as optimism grew around the country's trade negotiations with the United States ahead of an August 1 deadline for higher tariffs. The benchmark KOSPI was up 20.35 points, or 0.63%, at 3,250.92, as of 0215 GMT, hitting its highest level since August 2021. Three South Korean cabinet-level officials met U.S. Commerce Secretary Howard Lutnick in Washington in a push to close a trade deal, Seoul said on Wednesday, squaring off with a key U.S. official driving a hard bargain just ahead of the August 1 deadline. Among index heavyweights, Samsung Electronics rose 2.55%, after the chipmaker signed a $16.5 billion chip-supply deal with U.S. electric-vehicle maker Tesla earlier this week. Peer SK Hynix was flat. Battery maker LG Energy Solution was little changed, after a $4.3 billion contract to supply Tesla with lithium iron phosphate (LFP) batteries for energy storage systems. Peers Samsung SDI and SK Innovation jumped 7.54% and 6.28%, respectively. Hyundai Motor and sister automaker Kia Corp were up 1.61% and 2.37%, respectively. Of the total 935 traded issues, 535 shares advanced, while 343 declined. Foreigners were net buyers of shares worth 155.2 billion won ($112.29 million). The won was quoted at 1,382.5 per dollar on the onshore settlement platform, 0.52% higher than its previous close at 1,389.7.
CNA
2 days ago
- Automotive
- CNA
Musk's Tesla signs $16.5 billion chip supply deal with Samsung
SEOUL :Tesla CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares soared nearly 7 per cent after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. Shares of Samsung jumped 6.8 per cent to their highest since September last year, while Tesla shares were up 1.9 per cent in U.S. pre-market trading. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful," although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. POTENTIAL PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's AI4 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. It holds just 8 per cent of the global foundry market, far behind industry leader TSMC, which has a 67 per cent share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. HELP SAMSUNG'S FOUNDRY BUSINESS The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profit and share price. Earlier this month, Samsung projected a 56 per cent drop in second-quarter operating profit, partly due to widening losses of its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital-intensive business. TSMC counts Apple, Nvidia and Qualcomm among its customers.
Reuters
2 days ago
- Automotive
- Reuters
Musk's Tesla signs $16.5 billion chip supply deal with Samsung
SEOUL, July 28 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics ( opens new tab, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares soared nearly 7% after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC ( opens new tab and SK Hynix ( opens new tab. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. Shares of Samsung jumped 6.8% to their highest since September last year, while Tesla shares were up 1.9% in U.S. pre-market trading. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful," although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML ( opens new tab chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's AI4 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. It holds just 8% of the global foundry market, far behind industry leader TSMC ( opens new tab, which has a 67% share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla (TSLA.O), opens new tab was the customer for the deal. The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix ( opens new tab. This lag has weighed heavily on its profit and share price. Earlier this month, Samsung projected a 56% drop in second-quarter operating profit, partly due to widening losses of its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital-intensive business. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. ($1 = 1,378.7000 won)
CNA
3 days ago
- Automotive
- CNA
Musk says Tesla, Samsung Electronics sign chip supply deal
SEOUL :Tesla CEO Elon Musk said on Monday that the U.S. automaker has signed a deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers. The Samsung-Tesla deal is also significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it struggles to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.
Business Times
4 days ago
- Business
- Business Times
Samsung reasserts clout as top South Korean stock on AI catch-up hopes
[HONG KONG] Samsung Electronics has at least briefly reassumed its place as South Korea's most important stock, as investors eye chances for it to eventually make up lost ground in advanced memory chips for artificial intelligence (AI). Its shares are up 10 per cent in July, while those of smaller rival SK Hynix have dropped nearly 8 per cent. Samsung has accounted for more than a third of this month's gain in Korea's Kospi, the world's best-performing major equity index this year. 'In the past one month, we noted growing interest from investors on Samsung's comeback in the high-bandwidth memory (HBM) market,' JPMorgan Chase analyst Jay Kwon wrote in a Jul 8 note. 'We see Samsung R&D progress moving in a positive direction.' The market is betting on further gains in Samsung shares, which have seen a net inflow of about US$1.2 billion in July, while those of SK Hynix have notched an outflow of more than US$200 million. Meanwhile, short interest in Samsung has retreated over the past few months as bearish wagers on SK Hynix climbed. Samsung has long dominated Kospi, with its current 15 per cent weighting still about double that of hard-charging No 2 SK Hynix. Yet SK Hynix shares have been the biggest index driver over the past two years, as investors cheered its early jump in the supply of HBM memory to work with Nvidia's AI processors. Leadership in HBM is unlikely to change in the near term, with SK Hynix unveiling plans for more spending on additional capacity as it reported record earnings on Thursday (Jul 24). Investors are anticipating that things will start to turn around for Samsung however, driving gains in its stock since it posted a profit decline earlier this month. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The preliminary results were bad, but the shares didn't fall, that's what a bottom looks like,' said Marcello Seongsoo Ahn, a portfolio manager at Quad Investment Management. 'The equity market is always six months ahead, meaning the tipping point of the stock price is maybe now.' All eyes are on the next generation of AI memory, with SK Hynix and US-based Micron Technology having already shipped samples of their HBM4 chips to customers. Analysts are increasingly touting prospects for Samsung to catch up sometime in the next year or two, with approvals from Nvidia being the key point to watch. SK Hynix's shares fell 1.3 per cent on Friday even after reporting record earnings for the June quarter, as analysts cautioned about intensifying competition in the HBM market. Sanford C Bernstein analyst Mark Li estimates SK Hynix has a 57 per cent share of the overall HBM market in 2025, followed by Samsung at 27 per cent and Micron at 16 per cent. By 2027, he sees the two Korean chipmakers holding 38 per cent each and Micron trailing at 24 per cent. A sign of caution for the overall industry was flagged by Goldman Sachs when it downgraded SK Hynix last week, on a forecast decline in HBM pricing next year, in addition to gains by competitors. Other risks include geopolitical tensions and tariffs, as well as possible new market entrants from China, much further down the line. There are other positive catalysts as well, including the outlook for Samsung's smartphone business, as well as its efforts to improve governance and raise valuations. Jay Y Lee, executive chairman and grandson of the group's founder, has survived legal challenges and is gradually shuffling management. 'It's interesting to see the changes that are going on at Samsung,' including its progress with Nvidia, said Tim Campbell, chief executive officer and managing partner of Edinburgh-based Baillie Gifford. There has also been a move towards loosening the founding family's grip, and 'that could be exciting if they manage to do that'. The company's detailed second-quarter earnings report is due on Jul 31. BLOOMBERG
