'Jensen Huang's Downfall' Turns the Tables... 2 Korean Companies Reap the Benefits [Weekend Money]

AMD and Google seen benefiting
Samsung Electronics and ISU Petasys in focus in Korea
Longstanding supply relationships with competitors are an advantage

Yonhap News Agency

On November 12 (local time), NVIDIA announced that CEO Jensen Huang would step down and that Chief Financial Officer Colette Kress would be appointed interim CEO. With a leading figure in the AI semiconductor market stepping aside, investors are turning their attention to competitors. Analysts say NVIDIA's instability could create an opportunity for other companies to win new orders. Korean companies that supply components to its competitors are also drawing investor interest.

On November 14, Samsung Securities made this assessment in a report. For now, the firm believes there is little likelihood that NVIDIA's earnings will be affected. "The supply chain needed for Rubin, its AI semiconductor, and its new product launch plans through 2028 are already in place," said Moon Joon-ho, an analyst at Samsung Securities. "NVIDIA has also said that, despite the management change, it will continue to honor its commitments to customers and proceed with product development as planned."

Even so, the absence of former CEO Huang is likely to be significant. Huang recognized AI's potential early on and expanded the scope of the business, from chips to server systems and investments in related companies. It is difficult to quantify the impact of the company's founder, who set this direction, stepping aside. The report also cited an investigation into alleged violations of export restrictions on China and the possibility of tighter regulations as medium- to long-term uncertainties.

Analyst Moon believes that, as demand for AI semiconductors remains strong, there may be opportunities for products from other companies. The leading alternatives are AMD's graphics processing units (GPUs) and Google's tensor processing units (TPUs), semiconductors designed for AI computing. He also expects investors to turn their attention to Broadcom, which works with Google and others on custom semiconductor businesses. A similar trend is already visible in share prices. So far this week, NVIDIA shares have fallen 11%, while AMD and Broadcom shares have risen 30% and 24%, respectively.

In Korea, the report singled out Samsung Electronics and Isu Petasys, as these companies previously had relatively large shares of supply to NVIDIA's competitors. The connection is Samsung Electronics' high-bandwidth memory (HBM) and Isu Petasys' substrates for TPUs. "These companies stand out because they have long-standing business relationships with competitors and are already part of their supply chains," Analyst Moon said. "Some intellectual property (IP) and design house companies could also benefit, but the competitiveness of new ASIC products is a separate matter, so expectations should not be excessive."

This content was produced with the assistance of AI translation services.