Nvidia's board is reportedly moving to dismiss CEO Jensen Huang amid an infidelity scandal, raising concerns over the domestic stock market. Huang has been instrumental in forming partnerships with South Korean companies like Samsung Electronics, Hyundai Motor, and SK Hynix for extensive technological collaboration in the K-semiconductor and AI sectors. If Huang's dismissal leads to a management vacuum at Nvidia, fears are growing that investments in AI could decline, increasing volatility in semiconductor stocks.
On November 12, Nvidia's stock fell 7.46% to $160.74 in after-hours trading on the Nasdaq. This drop followed reports that the board was preparing to dismiss Huang. During the trading session, Nvidia's stock dipped below $160, reaching a low of $158.51. Huang, who founded Nvidia in April 1993 and has been a leader in the global AI boom, is seeing his 33-year reputation erode just ten days after the scandal broke.
Wall Street has already begun to lower its price targets for Nvidia. U.S. investment firm Baird cut its target from $500 to $200, a 60% reduction. Analyst Tristan Gerra expressed concerns about the risks associated with the U.S. government's investigation into Huang, congressional reports, revenue risks related to China, and uncertainties stemming from the management vacuum. Morgan Stanley analyst Joseph Moore also emphasized that Huang's leadership was crucial in determining Nvidia's strategic direction, highlighting concerns about short-term uncertainties.
Domestic semiconductor companies closely tied to Nvidia are also experiencing significant stock volatility. In the KOSPI market, Samsung Electronics and SK Hynix account for 48% of the total market capitalization, while semiconductor materials, components, and equipment firms connected to these companies represent 25% of the KOSDAQ market. Analysts suggest that if Nvidia's management vacuum alters the direction and pace of the AI semiconductor investment cycle, the impact could ripple through to Samsung Electronics, SK Hynix, and KOSDAQ component stocks.
Samsung Electronics and SK Hynix are key suppliers of high-bandwidth memory (HBM) to Nvidia and are solidifying their next-generation AI semiconductor partnerships. Since the New York Times first reported allegations linking Huang to Chinese intelligence on October 28, Samsung's stock has dropped 15.31% from 245,000 won to 207,500 won over 11 trading days. During the same period, SK Hynix's stock fell 16.31%, from 1,508,000 won to 1,262,000 won.
Samsung Electro-Mechanics, which has a partnership with Nvidia to supply AI semiconductor package substrates and is expanding its production facilities, saw its stock decline by 32.82%, from 1,315,000 won on October 28 to 885,000 won. Isu Petasys, which supplies Nvidia with essential ultra-high-density printed circuit boards for AI accelerators (GPUs) and servers, recorded a 13.27% drop due to concerns over weakened AI infrastructure investments. Other companies, such as Daeduck Electronics (-32.25%) and Hanmi Semiconductor (-10.61%), also experienced significant volatility. These stock movements far exceed the average decline of 11.11% in the KOSPI during the same period.
However, some analysts believe the long-term impact will be limited. Yang Ji-hwan, head of Daishin Securities, stated, "There are no companies worldwide other than Samsung and Hynix that can supply HBM to Nvidia. While Huang played a leading role, U.S. investments in AI semiconductors are unlikely to decrease amid the ongoing U.S.-China power struggle, and Nvidia will continue to produce chips." He added, "Just because Steve Jobs stepped down as Apple CEO doesn't mean Apple's stock collapsed. While there will be uncertainties regarding the CEO's management style and corporate philosophy in the short term, it won't fundamentally change the company's trajectory."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.