Jensen Huang Scandal Creates New Uncertainty in Global Semiconductor Market

'Is it a breeze or a storm?'
Global semiconductor companies were on high alert on November 9 as the fallout from NVIDIA CEO Jensen Huang's scandal unfolded. While allegations of espionage involving China remain unverified, concerns are growing that the situation could have significant repercussions due to NVIDIA's dominant position in the global semiconductor value chain.

On this day, NVIDIA's stock fluctuated in after-hours trading as the scandal's impact became apparent. Following the emergence of Huang's scandal over the weekend, the stock price dropped by approximately 4.2% early on November 8 (local time) on the online trading platform Robinhood. Bloomberg reported that this scandal could exert additional downward pressure on NVIDIA's stock, which has already fallen about 22% from last month's peak.

Other semiconductor companies appeared to be unaffected by the scandal for now. While shares of Japan's Kioxia fell by 2.46%, South Korean semiconductor stocks rose. Samsung Electronics closed at 189,900 won, up 1,200 won (0.64%) from the previous trading day, while SK Hynix finished at 1,136,000 won, up 4,000 won (0.35%).

Analysts are viewing this incident as a new variable for the semiconductor sector. Lee Kyung-min, a researcher at Daishin Securities, stated, "The scandal involving NVIDIA CEO Jensen Huang has emerged as a new uncertainty factor. While no evidence of national security or confidentiality breaches has been confirmed, the ongoing requests for private briefings from U.S. House committees leave uncertainty lingering."

The market is wary that this situation could extend beyond mere executive risk and lead to tighter U.S. export regulations on semiconductor sales to China. If NVIDIA's exports of AI semiconductors to China face further restrictions, it could indirectly affect Samsung Electronics and SK Hynix, which supply high-bandwidth memory (HBM) used in those products. However, some analysts believe that the impact on NVIDIA's performance may be limited, as its business in China is already subject to significant regulations.

Some analysts suggest that the greater risk for domestic semiconductor companies may arise from potential changes in NVIDIA's governance structure, which could delay investments and product launches. Ryu Young-ho, a researcher at NH Investment & Securities, told Reuters, "It appears that the U.S. government has been aware of this issue for several months, so the immediate impact may not be significant. The biggest potential risk for Korean companies is if NVIDIA's investment decisions are delayed due to prolonged investigations or internal reviews."