Samsung Electro-Mechanics is seeing a surge in its stock price following news of a long-term supply agreement with NVIDIA for next-generation artificial intelligence (AI) semiconductor package substrates. The company’s shares are bucking the trend, rising while other major semiconductor stocks like Samsung Electronics and SK Hynix face downward pressure.
As of 10:40 a.m. (KST) on Thursday, the Korea Exchange reported that Samsung Electro-Mechanics was trading at 1,183,000 KRW (about 895 USD), up 15,000 KRW (about 11.4 USD) (1.28%) from the previous day’s close.
The stock climbed as high as 1,234,000 KRW (about 934 USD) during the session but retreated somewhat as retail investors cashed in their profits. Foreign and institutional investors are currently net buyers of the stock.
Market analysts attribute the stock’s upward movement to the announcement of Samsung Electro-Mechanics’ strategic partnership with NVIDIA for AI semiconductor package substrates.
On Wednesday, Samsung Electro-Mechanics revealed plans to collaborate with NVIDIA on joint investments in domestic production facilities. This move aims to secure a stable supply of advanced package substrates for AI semiconductors, marking the beginning of a long-term supply partnership.
The two tech giants intend to expand dedicated production lines for AI semiconductor package substrates at Samsung Electro-Mechanics’ facilities in Sejong and Busan. Starting this year, Samsung Electro-Mechanics will begin supplying NVIDIA with AI processing chipsets and package substrates for data center networks under a multi-year agreement.
Samsung Electro-Mechanics projects that its supply volume to NVIDIA will grow at a double-digit annual rate beginning this year. The company anticipates that by 2028, NVIDIA-bound supplies will constitute a substantial portion of its total package substrate production capacity.