Samsung’s inventory at its lowest in 4 years due to downturn in AI chip demand, Trump’s election

Samsung Electronics, the world’s largest reminiscence chip producer, noticed its inventory drop to its lowest level in over 4 years on Wednesday. The South Korean tech large has been grappling with an ideal storm of challenges, from lagging behind opponents within the AI chip market to renewed considerations over potential US tariffs underneath a Donald Trump administration.

The decline marks a major setback for Samsung, which has struggled in comparison with international chipmaking giants like TSMC and NVIDIA. Despite the booming demand for synthetic intelligence chips, Samsung has did not capitalise successfully, leaving its inventory as one of many worst performers within the semiconductor sector this yr.

Fears over Trump’s potential tariffs have compounded Samsung’s woes. The former president has proposed a sweeping 10 per cent tariff on imports and a large 60 per cent levy particularly on Chinese items. Analysts warn that such measures might severely impression Samsung, which depends closely on Chinese prospects.

Lee Min-hee of BNK Investment & Securities highlighted that Samsung might face higher repercussions than native rival SK Hynix, which has been much less uncovered to Chinese markets and has efficiently ramped up gross sales of high-end AI server chips to US firms like NVIDIA.

The ripple results of those tariff threats have already raised alarm amongst South Korean officers. President Yoon Suk Yeol voiced considerations that heightened tariffs on Chinese imports could lead on Chinese opponents to slash export costs, placing additional stress on Korean chip producers and their potential to compete internationally.

Samsung’s inventory efficiency has been bleak, down 34 per cent this yr and heading for its worst annual decline in over twenty years.

By distinction, SK Hynix has loved a 32 per cent improve, because of its strategic pivot to AI chip gross sales within the US. NVIDIA, a key participant within the AI chip market, has seen an astonishing 199 per cent surge in its inventory worth this yr.

As of Wednesday morning, Samsung’s shares fell 2.1 per cent, extending a four-session shedding streak, and even dipped as little as 51,700 received, marking the bottom degree since June 2020. The broader KOSPI index additionally noticed a downturn, slipping 1.5 per cent. Meanwhile, SK Hynix managed to rebound, climbing as a lot as 2 per cent after two consecutive days of declines.

The downturn underscores the mounting stress on Samsung to regulate its technique and handle the rising threats from each international opponents and geopolitical uncertainties. With AI chip demand evolving and commerce tensions looming, Samsung’s path ahead stays unsure.