Booming AI chip demand helps create two new $1T club members
SK Hynix and Micron join the trillion-dollar valuation club on the back of AI data center demand, with Samsung also reaching the milestone, amid growing concerns about an AI bubble.
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Key points
- SK Hynix and Micron surpassed $1T market cap due to AI chip demand surge.
- Samsung Electronics became the second Asian firm to reach $1T.
- Nvidia remains the biggest AI winner, reaching $5T valuation.
- Investors warn of potential AI bubble and overvaluation.
Why it matters
This matters because SK Hynix and Micron surpassed $1T market cap due to AI chip demand surge.
Technical impact
May affect GPUs, inference clusters, compute cost, and supply-chain planning.
Booming AI chip demand helps create two new $1tn club members
2 hours ago
Osmond ChiaBusiness reporter
SK Hynix
Employees of SK Hynix, a South Korean chip manufacturing giant
The stock market valuations of chipmakers SK Hynix and Micron have risen above the $1tn (£740bn) mark, driven by a boom in artificial intelligence (AI) data centres.
Shares in South Korea's SK Hynix, a key supplier to AI chip giant Nvidia, jumped by 10% on Wednesday, continuing a rally that has seen its share price more than triple since the start of this year.
On Tuesday, US memory chipmaker Micron's shares rose by almost 20% after investment bank UBS tripled its stock price target for the company.
Both companies join a growing group of firms with valuations above $1tn, including technology giants Nvidia, Amazon, Apple, Microsoft, Google-owner Alphabet and Meta.
There has been massive global demand for advanced computer chips that power AI tools, lifting the shares of companies associated with the technology.
The surge in demand in recent years has led to a global memory chip shortage, pushing up sales for manufacturers like SK Hynix and Micron.
Earlier in May, South Korea's Samsung Electronics, known for its smartphones and televisions, joined the $1tn club and became only the second Asian firm to reach the milestone after Taiwanese chipmaker TSMC.
Samsung is also a major manufacturer of semiconductors, with Nvidia among its customers.
Separately, Samsung's shares jumped by more than 6% on Wednesday after union members voted in favour of a pay deal, averting a strike that threatened to hit its business.
Samsung is now valued at around $1.34tn, with its shares more than doubling since the start of this year.
It comes as South Korea's benchmark Kospi stock index, which is dominated by tech firms, also hit a fresh record high.
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Nvidia has been the biggest winner in the AI spending spree and in October became the first company to reach a stock market value of $5tn.
The firm continues to report record sales, though there have been growing concerns over increasec competition in the sector.
Microsoft and Apple have also recently crossed the $4tn valuation mark.
But some investors have warned of a potential AI bubble, questioning whether these companies are overvalued.
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