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Samsung and SK Hynix Surge After OpenAI Chip Partnership Boosts AI Optimism

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Shares of Samsung Electronics and SK Hynix soared on Thursday after OpenAI announced a major partnership with the two South Korean chipmakers to support its massive Stargate artificial intelligence data centre project in the United States.

Samsung Electronics jumped 4.7%, reaching its highest level in more than four years, while SK Hynix surged 12% to an all-time high, adding a combined $37 billion in market capitalization.
The rally also lifted South Korea’s benchmark KOSPI index by more than 3%, marking a new record.

MARKET REACTION AND ANALYST INSIGHT

Analysts said the partnership could dispel earlier market fears about potential declines in high-bandwidth memory (HBM) chip prices amid rising competition.

“Such worries will be easily resolved by this strategic partnership,” wrote Jeff Kim, analyst at KB Securities, predicting a sharp rise in chip demand driven by the Stargate project.
Kim added that, since Stargate is a key U.S. government-backed initiative led by President Donald Trump, the collaboration could also positively influence trade negotiations between Washington and Seoul.

DETAILS OF THE PARTNERSHIP

The deal — part of the $500 billion Stargate project aimed at building next-generation AI infrastructure — will see OpenAI, Samsung, and SK Hynix jointly work on semiconductor procurement and the construction of two data centres in South Korea, referred to as a “Korean-style Stargate.”
Each data centre will start with a 20-megawatt capacity, and Seoul hopes the project will help position South Korea as an Asian AI hub, given that the country already ranks second globally in the number of paying ChatGPT subscribers after the United States.

WIDER IMPACT ON SAMSUNG AFFILIATES

Other Samsung affiliates also gained sharply on the news:

  • Samsung SDI rose on expectations of increased demand for advanced power systems.

  • Samsung C&T and Samsung SDS advanced after confirming new roles in AI data centre construction and infrastructure partnerships with OpenAI.

STRONGER EXPORT OUTLOOK

The AI-driven semiconductor boom has been a key factor in South Korea’s economic rebound, with exports rising in September at their fastest pace in 14 months, defying concerns about the impact of U.S. tariffs.
Seoul hopes to finalize a trade agreement with the United States by late October, following a preliminary deal reached in July that would lower tariffs on South Korean imports in exchange for a $350 billion U.S. investment package.

However, officials have said talks have stalled over concerns about foreign exchange risks and the structure of the investment commitments.

Samsung Profit Plunges 56% Amid AI Chip Woes, U.S. Export Curbs to China

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Samsung Electronics reported a steep 56% year-on-year drop in Q2 operating profit, projecting earnings of 4.6 trillion won ($3.36 billion)—significantly below analyst expectations of 6.2 trillion won, according to LSEG SmartEstimate. This marks Samsung’s weakest quarterly performance in six quarters, as its semiconductor division continues to struggle with shifting global dynamics in the AI chip market.

The South Korean tech giant blamed its sharp decline on U.S. restrictions on AI chip exports to China, which have disrupted its sales pipeline. However, analysts pointed to delays in delivering high-bandwidth memory (HBM) chips to Nvidia as a major factor in its underperformance. Unlike rivals SK Hynix and Micron, which have seen strong AI-driven chip demand, Samsung has been slower to supply its latest HBM3E 12-layer chips, with customer evaluations still ongoing and no specific update on Nvidia shipments.

“Everything ultimately comes back to HBM,” said Ryu Young-ho, an analyst at NH Investment & Securities, noting that Samsung’s competitive edge hinges on reclaiming leadership in the HBM segment.

Revenue for the quarter is expected to come in nearly flat at 74 trillion won, down just 0.1% from a year ago. But the semiconductor division likely took the hardest hit, with analysts estimating its operating profit may have dropped over 90% to just 500 billion won, partly due to inventory value adjustments and unsold HBM stockpiles.

Adding to the challenges, potential U.S. tariffs and mounting competition in China—where Samsung still has a heavy market presence—are expected to weigh on both its chip and smartphone margins in the near term.

Samsung’s foundry business also saw falling earnings, attributed to low utilisation rates and inventory write-downs, stemming from the same U.S. AI chip export restrictions. However, the company expects foundry performance to gradually improve in the second half of 2025 as utilisation recovers with demand.

Despite the weak outlook, Samsung announced a 3.9 trillion won ($2.85 billion) share buyback, part of a broader 10 trillion won repurchase plan unveiled in late 2024. Investors remained cautious, with Samsung shares slipping 0.2%, while Korea’s benchmark KOSPI index rose 1.2% during morning trading.

Looking ahead, Samsung hopes to recover with upcoming phone launches and by expanding HBM sales beyond Nvidia to other customers. A full breakdown of business unit performance is expected on July 31, when the company releases its detailed Q2 earnings report.

Samsung Electronics Faces 39% Drop in Q2 Profit Amid Weak AI Chip Sales

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Samsung Electronics is expected to report a 39% decline in its second-quarter operating profit, largely due to delays in supplying advanced memory chips to AI chip leader Nvidia, industry analysts said. The South Korean tech giant is forecast to announce an operating profit of 6.3 trillion won ($4.62 billion) for April to June, marking its lowest earnings in six quarters, according to LSEG SmartEStimate.

This downturn has raised concerns about Samsung’s ability to compete with rivals like SK Hynix and Micron in the rapidly growing market for high-bandwidth memory (HBM) chips used in artificial intelligence data centers. While its competitors have seen strong demand, Samsung’s growth has been limited by its heavy reliance on the China market, where U.S. export restrictions have curbed sales of advanced chips.

Analysts point out that Samsung’s latest HBM chips, specifically the HBM3E 12-high version, have not yet received Nvidia’s certification, slowing supply to the U.S. AI chip leader. Ryu Young-ho, senior analyst at NH Investment & Securities, noted that Samsung’s shipments to Nvidia are unlikely to be significant in 2025. Samsung has, however, started supplying the new chip to AMD since June.

Despite challenges in the chip segment, Samsung’s smartphone sales remain steady, supported by stockpiling ahead of potential U.S. tariffs on imported devices. Nonetheless, ongoing U.S. trade policies, including proposed tariffs on non-U.S.-made smartphones and possible restrictions on technology exports to Samsung’s Chinese plants, continue to create business uncertainty.

Samsung’s shares have underperformed this year compared to the KOSPI index, rising about 19% against the KOSPI’s 27.3% increase. As of Monday, Samsung shares dipped 1.9%, while the KOSPI rose 0.3%.