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SK Hynix and Samsung Electronics shares jumped after the two biggest South Korean chipmakers signed a letter of intent with OpenAI to supply semiconductors for the US AI company’s $500bn Stargate data centre project.
Shares of SK Hynix, the leading producer of high bandwidth memory products used in Nvidia’s most advanced artificial intelligence chips, climbed as much as 12 per cent on Thursday, while Samsung Electronics shares rose by close to 5 per cent to reach their highest level since 2021.
The letter of intent was signed on Wednesday during a visit to Seoul by OpenAI chief executive Sam Altman, who met the chairs of SK Group and Samsung as well as South Korea’s president Lee Jae Myung.
SK Hynix “will establish a production system capable of promptly meeting OpenAI’s HBM demand for up to 900,000 Dram wafers per month”, said the chipmaker’s parent company.
“It is more than double the current HBM industry capacity, underscoring the immense semiconductor demand driven by the Stargate project,” it said, noting that SK’s telecoms subsidiary would also work with OpenAI to build a “Stargate Korea” AI data centre in the south-west of the country.
Nvidia last month announced plans to invest up to $100bn in OpenAI in return for a significant stake in the ChatGPT maker, as part of a deal to build up to 10 gigawatts of processing capacity — the equivalent output of 10 nuclear reactors.
Memory chips are critical for the performance of AI semiconductors and data centres due to the huge amounts of information that need to be processed by leading large language models.
Shares in SK Hynix, which enjoys a more than 50 per cent share of the global HBM market, have risen more than 430 per cent since the beginning of 2023 as demand for AI services has boomed. Its HBM3E chips are capable of transferring data equivalent to 200 feature-length movies every second, according to the company.
Samsung accounts for just over a quarter of the global HBM market with US-based Micron the other leading player in the sector, according to consultancy TrendForce.
Samsung said that OpenAI would work with other subsidiaries in its Korean conglomerate including the construction and shipbuilding units in order to build “floating data centres” that it said can “address land scarcity, lower cooling costs and reduce carbon emissions”.
