Samsung Electronics shares reached a four-year low on Wednesday, impacted by concerns over potential U.S. tariffs on Chinese imports under a possible new Donald Trump administration, as analysts note. The South Korean technology giant, a major player in the global memory chip market, has underperformed in 2023, trailing behind competitors like TSMC and Nvidia, who have capitalized on surging demand for artificial intelligence (AI) chips.
Samsung’s heavy reliance on Chinese customers, compared to its South Korean rival SK Hynix, could make the company particularly vulnerable to Trump’s proposed tariffs. Lee Min-hee, an analyst at BNK Investment & Securities, highlighted that SK Hynix has expanded sales of high-end AI server chips to U.S. clients like Nvidia, positioning itself to be less affected by U.S.-China trade tensions. Trump’s suggested tariffs include a universal 10% on imports and a sharper 60% rate specifically on goods from China, which Hyundai Motor Securities analyst Greg Noh suggests could weaken demand for electronics that incorporate chips.
This economic uncertainty has weighed heavily on Samsung’s stock performance. Shares are down by 34% this year, with the company facing its worst annual downturn in more than two decades. The stock, South Korea’s most valuable, declined for a fourth straight session, falling 2.1% by 0126 GMT to 51,700 won, its lowest level since June 24, 2020. In contrast, SK Hynix, which initially dropped over the past two sessions, recovered with a 2% gain, while U.S. chip giant Nvidia has surged by 199% this year.
The downturn in Samsung’s share price comes amid broader market concerns, as President Yoon Suk Yeol of South Korea recently raised alarms that potential U.S. tariffs could trigger aggressive price cuts by Chinese chipmakers, potentially undermining South Korean chip firms in the global market. The KOSPI index also fell by 1.5%, reflecting broader market jitters.
Featured image courtesy of Asia Fund Managers
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