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As Chase for AI Concepts Spreads, Hedge Funds Target S Korean Memory Chip Makers
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Reuters reported that hedge funds looking for artificial intelligence concepts are targeting South Korean chipmaker stocks, including Samsung Electronics and SK Hynix, betting on demand for high-end memory chips and government support. According to the report, the market's focus is shifting to memory chips, as AI technology companies need high-bandwidth memory chips from Samsung Electronics, SK Hynix and Micron Technology (MU.US). SK Hynix is a major supplier of high-bandwidth memory chips to Nvidia (NVDA.US). Some investors estimate that SK Hynix derived more of its revenue from Nvidia when compared to TSMC (TSM.US), but SK Hynix's current valuation is equivalent to 9x its projected P/E ratio for the next 12 months, well below TSMC's 23x. In addition, the South Korean government's US$19 billion support for the chip industry and the promotion of enterprise value-up programmes, which have enabled South Korean companies to improve shareholder returns in line with their Chinese and Japanese counterparts, are all favourable to South Korean chip stocks. The Korea Composite Stock Price Index (KOSPI) was the best in seven months last month, and South Korea's stock market has seen one of the largest net inflows of foreign capital into an emerging Asian market so far this year, while also being the largest since 2008. AAStocks Financial News |
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