Samsung's stock at its lowest in 4 years because of downturn in AI chip demand, Trump's election

Samsung Electronics, the world’s largest memory chip manufacturer, saw its stock drop to its lowest point in over four years on Wednesday. The South Korean tech giant has been grappling with a perfect storm of challenges, from lagging behind competitors in the AI chip market to renewed concerns over potential US tariffs under a Donald Trump administration.

The decline marks a significant setback for Samsung, which has struggled compared to global chipmaking giants like TSMC and NVIDIA. Despite the booming demand for artificial intelligence chips, Samsung has failed to capitalise effectively, leaving its stock as one of the worst performers in the semiconductor sector this year.

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 massive 60 per cent levy specifically on Chinese goods. Analysts warn that such measures could severely impact Samsung, which relies heavily on Chinese customers.

Lee Min-hee of BNK Investment & Securities highlighted that Samsung could face greater repercussions than local rival SK Hynix, which has been less exposed to Chinese markets and has successfully ramped up sales of high-end AI server chips to US companies like NVIDIA.

The ripple effects of these tariff threats have already raised alarm among South Korean officials. President Yoon Suk Yeol voiced concerns that heightened tariffs on Chinese imports could lead Chinese competitors to slash export prices, putting further pressure on Korean chip manufacturers and their ability to compete internationally.

Samsung’s stock performance has been bleak, down 34 per cent this year and heading for its worst annual decline in over two decades.

By contrast, SK Hynix has enjoyed a 32 per cent increase, thanks to its strategic pivot to AI chip sales in the US. NVIDIA, a key player in the AI chip market, has seen an astonishing 199 per cent surge in its stock price this year.

As of Wednesday morning, Samsung’s shares fell 2.1 per cent, extending a four-session losing streak, and even dipped as low as 51,700 won, marking the lowest level since June 2020. The broader KOSPI index also saw a downturn, slipping 1.5 per cent. Meanwhile, SK Hynix managed to rebound, climbing as much as 2 per cent after two consecutive days of declines.

The downturn underscores the mounting pressure on Samsung to adjust its strategy and address the rising threats from both global competitors and geopolitical uncertainties. With AI chip demand evolving and trade tensions looming, Samsung’s path forward remains uncertain.