South Korean semiconductor companies saw their shares plunge on Tuesday, with SK Hynix falling almost 15% and Samsung Electronics dropping more than 13%. This downturn is part of a larger trend affecting chipmakers globally.
The decline in South Korean semiconductor stocks is likely to impact U.S. chipmakers as well, given the interconnected nature of the global semiconductor industry.
Global Chipmakers Feel the Pressure
The ongoing rout has already affected Nvidia, which lost its position as the world’s most valuable company on Monday to Apple. Nvidia‘s stock fell almost 5% on Monday, bringing its valuation down to $4.77 trillion, while Apple‘s shares rose about 1%, nearing a $5 trillion valuation ahead of its earnings call.
This shift in valuation is significant, marking the first time since June 2025 that Nvidia is not the world’s most valuable company. The trend continued on Tuesday, with Nvidia continuing to lose value and Apple remaining in the green.
Market Performance and Challenges
So far this year, Nvidia‘s stock has gained 4%, while Apple‘s has soared 24%. Apple‘s decision to rent AI capacity rather than building its own has been a key factor in its outperformance of the broader market.
Nvidia, on the other hand, is facing several challenges, including the delay of its next-generation Kyber NVL144 rack-scale AI system. This delay, reportedly due to manufacturing challenges with a critical component, has pushed the launch from 2027 to 2028.
According to industry trends, the demand for AI chips from cloud providers has been unprecedented, adding to Nvidia‘s challenges. Export restrictions affecting sales to China and governmental priorities on domestic semiconductor production and supply chain resilience further complicate the situation.
The Kyber NVL144 system is designed to house 144 of Nvidia‘s highest-performance graphics processing units (GPUs) in a single rack, operating as one integrated computing system for training and running large artificial intelligence models. Its unique architecture, unveiled alongside the Vera Rubin Ultra platform during Nvidia‘s GTC developer conference, aims to increase computing density and reduce latency.
Impact on the Semiconductor Industry
The delay in Nvidia‘s Kyber NVL144 launch reflects the broader challenges in the semiconductor industry, where manufacturing complexities and geopolitical tensions are influencing production and supply chains. As companies like Apple and Nvidia develop strategies, such as renting AI capacity or focusing on domestic production, these approaches will determine their future success.
In the midst of these developments, the semiconductor industry’s ability to adapt to changing demand, technological advancements, and regulatory environments will be key to its resilience and growth. The interplay between these factors will continue to shape the market, influencing the valuations and performances of companies like Nvidia and Apple.
