South Korean tech giant Samsung Electronics Co., which was expected to capitalize on the booming AI market, has seen a sharp downturn in recent months, highlighted by a 32% stock decline since July and a staggering $122 billion loss in market value, according to an article by Youkyung Lee and Yoolim Lee for Bloomberg News published on Tuesday.
Shares of Samsung Electronics (a subsidiary of Samsung Group) are listed on the Korea Exchange (KRX) under the ticker symbol 005930. Furthermore, Global Depository Receipts (GDRs) for Samsung are available on the London Stock Exchange (LSE) under the ticker SMSN. Samsung also lists preferred share GDRs on the Luxembourg Stock Exchange (LuxSE) under the ticker SMSEL, offering international investors access to Samsung shares across multiple markets for trading flexibility and accessibility.
The company’s recent performance underscores the pressures faced in a highly competitive chip sector, where market share and technology leadership can shift rapidly.
According to the Bloomberg report, Samsung’s missteps in AI-focused memory technology, particularly its delay in delivering the latest high-bandwidth memory (HBM) chips, have allowed rivals like SK Hynix Inc. and Micron Technology Inc. to seize the advantage. This setback comes as Samsung’s stock reached near-record highs in July, buoyed by a remarkable 15-fold profit increase in the second quarter. However, as SK Hynix began mass production of its own HBM chips, Samsung acknowledged in early October that it was behind schedule, diminishing hopes that it could win over clients such as Nvidia for AI memory products.
HBM chips, which are optimized to support the substantial data demands of artificial intelligence workloads, are critical to AI applications. Unlike conventional memory, HBM is engineered to handle enormous datasets at high speeds, a necessity for AI tasks like training large models and processing real-time data efficiently. This unique capability makes HBM particularly valuable in data centers and high-performance hardware, including GPUs and processors used in AI-driven technologies by firms like Nvidia.
The Bloomberg article went on to say that beyond its AI memory lag, Samsung’s ongoing struggle in the semiconductor foundry business further compounds its challenges. Despite significant investments aimed at narrowing the gap with Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung has apparently yet to gain substantial ground. This battle has drawn comparisons with Intel Corp., which similarly encountered obstacles in expanding its outsourced chip manufacturing.
These challenges have seemingly shaken investor confidence, with overseas shareholders offloading roughly $10.7 billion in Samsung shares since late July. While Pictet Asset Management and Janus Henderson Investors initially viewed Samsung’s valuation favorably, recent remarks from their portfolio managers reveal a pivot toward competitors like SK Hynix, reflecting skepticism around Samsung’s ability to stage a quick recovery.
In the year-to-date period, shares of Samsung Electronics are down 25.75%.
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