Samsung shares hit 4-year high, SK Hynix hits record after OpenAI deal

Quotes of Samsung Electronics and SK Hynix in the morning of October 2, updated multi-year highs thanks to the fact that OpenAI has chosen them as suppliers for its Stargate project - an initiative to create large-scale data centers for AI. The partnership between the South Korean giants eases concerns about a possible drop in memory chip prices due to increased competition between them, analysts said.

Samsung shares rose almost 5% in Seoul trading and reached the highest level in more than four years. SK Hynix shares soared 12%, renewing the record held since the dot-com boom era. According to Reuters calculations, the combined capitalization of the two South Korean companies jumped by $ 37 billion. The growth of these two largest "blue chips" of the underlying South Korean index Kospi pushed up and the benchmark itself - it rose by more than 3% and for the first time crossed the level of 3500 points, notes Nikkei Asia.

Hours before the start of trading in Seoul, OpenAI announced a strategic partnership with Samsung and SK Hynix aimed at "increasing the supply of advanced memory chips needed for next-generation artificial intelligence and expanding data center capacity in Korea." The partnership with OpenAI under the Stargate project, which involves major players in the sector from Nvidia to Oracle, will provide Samsung and SK Hynix with demand for 900,000 memory chip wafers per month, the ChatGPT developer said in a statement. This projected demand is more than double the current global high-bandwidth memory (HBM) production capacity, Bloomberg reports.

Samsung subsidiaries Samsung SDS, Samsung C&T and Samsung Heavy Industries will also collaborate with OpenAI on future technologies. SK Telecom will work with OpenAI to build a dedicated data center in southwestern South Korea.

"There were concerns that HBM chip prices would fall next year due to intensifying competition [between SK Hynix and Samsung], but this strategic partnership will easily allay them," Reuters quoted Jeff Kim of KB Securities as saying in a research note, who expects demand to surge thanks to the project. "As Stargate is a key project for President Trump, there is also the possibility that the partnership will have a positive impact on South Korea's trade negotiations with the U.S.," Kim added.

"[The deal] has served as a catalyst for stock prices to rise as the expansion of semiconductor infrastructure to support AI is inevitable," Lee Seung-woo, head of research at Eugene Investment, told Nikkei Asia. At the same time, he expressed caution about OpenAI's stated demand volume of 900,000 wafers per month: "Figures cannot always be trusted. There may be a certain gap between [plans] and reality".

OpenAI's agreements with Samsung Electronics and SK Hynix come 10 days after Nvidia said it intends to invest up to $100 billion in OpenAI as part of a strategic partnership, Nikkei Asiarecalls. The global AI chip market leader and the most expensive AI startup plan to deploy Nvidia systems with a capacity of at least 10 gigawatts in next-generation data centers.

This article was AI-translated and verified by a human editor