'Cheonvidia' Boosted '200,000 Nix'... Next is '80,000 Jeonja'?

NVIDIA Announces Earnings with 'Cheonvidia'
SK Hynix Supplying HBM Also '20mannix'
Continued Optimism for the 'Spring of Semiconductors'
Samsung Electronics Also Positive... Quality Testing is Key

NVIDIA, a global leader in the artificial intelligence (AI) chip market, announced strong earnings on the 23rd, brightening market outlooks for Korean semiconductor companies. Expectations grew that the 'Spring of K-Semiconductors' will continue, led by SK Hynix, which supplies semiconductors to NVIDIA.

Jensen Huang, CEO of NVIDIA, is showcasing a new product at the AI conference 'GTC 2024' held on March 18 (local time) in San Jose, California, USA. [Image source=Yonhap News]

In the early hours of the day, NVIDIA reported first-quarter fiscal year (February to April) revenue of $26.04 billion (35.6 trillion KRW) and earnings per share of $6.12 (8,366 KRW). Both figures far exceeded market expectations. Compared to the same period last year, revenue surged 262% from $7.19 billion. Earnings per share also increased 4.5 times from $1.09. NVIDIA forecasted that this upward trend would continue into the second quarter, projecting revenue of $28 billion for Q2 (May to July).

NVIDIA's stock price soared following the earnings announcement, creating the so-called 'Cheonvidia' (NVIDIA stock price reaching $1,000). According to the New York Stock Exchange, NVIDIA's stock traded at $1,008 in after-hours trading, up 6.16% from the regular session. This marked the first time NVIDIA's stock price surpassed $1,000. At one point, the price even approached around $1,020.

NVIDIA's soaring performance immediately impacted Korean semiconductor companies. In particular, SK Hynix appeared to be benefiting. SK Hynix, which supplies high-bandwidth memory (HBM) products to NVIDIA, saw its stock price rise to the 200,000 KRW range on the Korea Exchange. It opened at 203,500 KRW and climbed to as high as 204,000 KRW, marking the first appearance of the so-called '200,000-nix.'

SK Hynix's PCIe 5th generation SSD 'PCB01', Photo by SK Hynix [Image source=Yonhap News]

The upward trend is expected to continue beyond just a 'surprise' on this day. SK Hynix maintains a strong relationship with NVIDIA, a major player in the AI semiconductor market, and its next quarter earnings are also likely to show strong performance. SK Hynix has effectively monopolized the supply of HBM3 and began delivering the industry's first HBM3E 8-stack products in March.

Coinciding with this, SK Hynix publicly disclosed yield (the ratio of good products among finished goods) information for HBM3E for the first time, further raising market expectations. Kwon Jae-soon, SK Hynix's Vice President in charge of yield, recently told the UK daily Financial Times (FT) in an interview, "We have reduced the production time required for HBM3E chips by 50% and have nearly reached the target yield of 80%." This contradicted market estimates that had placed SK Hynix's HBM3E yield at around 60-70%. Vice President Kwon also emphasized, "This year, we are focusing on producing the 8-stack HBM3E that customers want most. Yield improvement is becoming increasingly important to stay ahead in the AI era."

Although not as clear-cut as SK Hynix, industry analysis suggests that Samsung Electronics will also rebound influenced by NVIDIA's strong earnings. NVIDIA is reportedly testing the quality of Samsung Electronics' HBM3E 12-stack products. If these tests are passed, Samsung Electronics could open a path to supply HBM to NVIDIA. To achieve this, Samsung Electronics has formed a dedicated task force (TF) with about 100 members and is operating a separate HBM4 development team. On the 21st, Samsung appointed Jeon Young-hyun, Vice Chairman and Head of Future Business Planning?known as a key figure in the 'semiconductor legend'?as the head of the Device Solutions (DS) division overseeing semiconductor business.