SK hynix Overtakes Samsung Electronics in South Korean Market Valuation as Artificial Intelligence Hardware and High Bandwidth Memory Dominance Drive Structural Industry Changes
For the first time in 25 years Samsung Electronics has yielded its position as the most valuable corporate entity in South Korea when evaluating common stock. Driven by the rapid expansion of the artificial intelligence hardware sector rival semiconductor manufacturer SK hynix has surpassed Samsung in market capitalization. According to financial data published by Reuters the market valuation of SK hynix climbed to 2080.4 trillion won which represents approximately $1.35 trillion. In comparison the capitalization of Samsung common stock sat at 2066.7 trillion won or roughly $1.34 trillion.
The main reason behind this money transfer is "an unmatched world hunger for High Bandwidth Memory that is a necessary element in artificial intelligence hardware accelerators". SK hynix became the biggest supplier of these high Technology maps chips to the biggest IT players like NVIDIA Microsoft and Google. Market reports state that SK hynix has now captured roughly 61% of the worldwide High Bandwidth Memory market whereas Samsung manages just about 17% of the same market.
This market lead is due to the tenacious strategic investments undertaken by SK hynix during past upturns of the semiconductor market, when other manufacturers decided to de prioritize the development of the next generation of memory. Those strategic investments are now paying off in spades. SK Group Executive Chairman Chey Tae won had to say about the strategic turn of the memory market, Memory chips have gone from hardware commodities to high end devices in many applications.
High Bandwidth Memory can no longer be viewed as a standard commodity because replacing the memory of a single manufacturer with another can alter the performance of the entire artificial intelligence system.
While the market valuation has moved away from Samsung, he still continues to be the world's largest producer of DRAM in terms of production volume. However, market intelligence found that the gap in production volume between the 2 players is narrowing. Industrial estimates predict SK hynix will produce around 589,000 DRAM silicon wafers by end of this year while Samsung will produce around 691,000 wafers.
The representative from Samsung claims that the overall corporate value should be inclusive of the company's own preferred shares. If you take into consideration the company's preferred shares the total valuation reaches approximately 2246 trillion won which is 1.46 trillion dollars. While this overall figure does not affect Samsung's overall leading position the rise of SK hynix common stock signals a dramatic structural change in the global technology supply chain.
