SEOUL, November 12 (AJP) - The prospect of Nvidia losing its founder split South Korea's two chip giants on Thursday, pulling down SK hynix, the memory maker seen as most exposed to Nvidia.
SK hynix fell 1.8 percent to 1,254,000 won (US$942.1). Samsung Electronics instead held on to gains, rising 1.0 percent to 208,000 won ($156.3). The Korea Composite Stock Price Index (KOSPI) gave back an early climb and finished 0.6 percent below the previous day's close, ending a two-day rally.
The trigger was a Wall Street Journal report that Nvidia's board was preparing to oust CEO Jensen Huang, which sent the U.S. chip designer's shares down more than 8 percent in after-hours trading. The unease reached Tokyo, where the Nikkei 225 fell 0.7 percent.
The main index in Seoul shed 32.63 points or 0.61 percent to 5,342.73.
The Nvidia board was meeting the previous day, to decide Huang's future, according to foreign media outlets. Huang has been reported to have had two extramarital affairs, one with a woman suspected by U.S. intelligence of working for Beijing.
Huang co-founded Nvidia in 1993 and has led it since. Its shares had closed the regular session up 2.9 percent at $173.73 before the report.
Kim Young-gun, an analyst at Mirae Asset Securities, said SK hynix's exposure to Nvidia's high-bandwidth memory (HBM) is relatively larger than Samsung's. HBM refers to the stacked chips that feed artificial intelligence (AI) processors.
Foreign investors bought a net 370.8 billion won ($278.6 million) of KOSPI shares, their third straight session of net buying. They had dumped 13.3 trillion won ($10.0 billion) between Oct. 30 and Nov. 9.
Institutions sold a net 691.1 billion won ($519.2 million), and individuals sold 204.0 billion won ($153.3 million) on options expiry day.
Han Ji-young of Kiwoom Securities pointed to profit-taking after the index's two-day surge, along with expiry-related selling pressure.
Decliners outnumbered gainers 595 to 271. Samsung Electro-Mechanics lost 4.0 percent to 886,000 won ($665.7), and Hyundai Motor fell 2.2 percent to 266,500 won ($200.2).
Meritz Financial Group plunged 13.1 percent to 112,600 won ($84.6) after third-quarter earnings missed forecasts.
Its net profit attributable to controlling shareholders fell 28.1 percent from a year earlier to 470.7 billion won ($353.6 million), about 26 percent below market consensus. Investment income at insurance unit Meritz Fire & Marine Insurance fell 87.9 percent on stock losses and real estate finance provisions.
The tech-heavy KOSDAQ slipped back below 700 a day after reclaiming it, losing 8.6 points, or 1.2 percent, to 696.5.
The South Korean won strengthened 6.5 won to 1,331.0 against the dollar.
In Tokyo, the Nikkei 225 snapped a three-session winning streak, falling 429.2 points to 60,819.4. Japanese market reports said concern over Nvidia's leadership weighed on the index during the session.
Seo Sang-young, a managing director at Mirae Asset Securities, said investors will watch whether Huang is actually removed and whether new management keeps Nvidia's AI investment strategy. He also warned of wider swings ahead of Nvidia's earnings next week.
Kim offered the counterpoint, saying a reshuffled supply chain does not translate directly into a drop in AI demand and that memory makers' bargaining power could even strengthen as their customer base diversifies.
AJP Takeaways
- Nvidia's leadership crisis reached South Korea through its supply chain on Nov. 12, pulling SK hynix down 1.8 percent while Samsung Electronics rose 1.0 percent.
- Foreign investors bought a net 370.8 billion won ($278.6 million) of KOSPI shares on Nov. 12, a third straight session of net buying, even as institutions sold a net 691.1 billion won ($519.2 million) on options expiry day.
- The Nvidia board's decision on CEO Jensen Huang and Nvidia's earnings next week are the next tests for SK hynix and Samsung Electronics.
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