Jensen Huang, CEO of NVIDIA, has resigned, creating tension within South Korea's semiconductor industry, including Samsung Electronics and SK Hynix. The uncertainty surrounding NVIDIA's partnership, particularly in high-bandwidth memory (HBM), has increased amid potential U.S. sanctions on semiconductor exports to China.
Concerns have been raised that if controversies surrounding NVIDIA's business in China lead to stricter export controls, it could disrupt operations at domestic companies' factories in China.
According to industry sources, Samsung Electronics and SK Hynix are closely monitoring changes in NVIDIA's management strategy and U.S. regulatory actions following Huang's resignation.
On November 12, NVIDIA's board announced that Huang had stepped down as CEO and director, with Colette Kress, the chief financial officer, appointed as interim CEO.
Huang had actively sought to expand cooperation with South Korean semiconductor firms. He held a meeting with Samsung Electronics Chairman Lee Jae-Yong last October and discussed AI collaboration with SK Group Chairman Chey Tae-Won in June.
Samsung Electronics and SK Hynix are key suppliers of HBM to NVIDIA, expanding their collaboration beyond memory supply to include AI infrastructure development.
Samsung plans to implement AI across its semiconductor production processes by introducing over 50,000 NVIDIA GPUs to establish a 'semiconductor AI factory.' SK Group also aims to utilize more than 50,000 GPUs for its manufacturing AI cloud and Ulsan AI data center.
However, analysts suggest that immediate disruptions to supply contracts or investment plans with NVIDIA are unlikely. Domestic companies have reportedly been negotiating specific business plans with NVIDIA's operational executives, including Senior Vice President Jeff Fisher, rather than Huang. With no clear succession plan established yet, it is anticipated that key executives will likely remain in their positions to ensure management stability.
The issue is compounded by Huang's resignation coinciding with heightened U.S. semiconductor regulations against China. As national security concerns surrounding Huang have emerged, voices in Congress are calling for stricter limitations on the export of advanced semiconductors to China.
In fact, Congress is looking to pass legislation to strengthen semiconductor export controls to China, such as the 'MATCH Act.' If the U.S. restricts the export of semiconductor equipment to its allies, it could hinder the import of equipment and upgrades at Samsung and SK Hynix's factories in China. Samsung produces NAND flash in Xi'an, while SK Hynix manufactures DRAM and NAND flash in Wuxi and Dalian, respectively.
Nevertheless, some analysts believe this situation may not be entirely negative for domestic companies. If access to advanced equipment is restricted for Chinese semiconductor firms, it could benefit Samsung and SK Hynix by helping them maintain a technological edge. Additionally, there may be opportunities to diversify their customer base and reduce reliance on NVIDIA.
An industry insider noted, "The management vacuum at NVIDIA could enhance the market competitiveness of companies like Google and AMD, which also require substantial memory, potentially prompting Samsung and SK Hynix to diversify their clientele."
* This article has been translated by AI.
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