Samsung shares reaches 52-week high as the world braces for an AI boom

Samsung Electronics shares closed higher on Tuesday with market optimism around generative AI and high-performance fueling recovery.

Samsung Electronics shares rose to 52-week high on Tuesday. [JOONGANG PHOTO]

Shares of Samsung Electronics continued their winning streak Tuesday amid upbeat expectations for AI and memory chips next year.

The company's shares closed at 76,600 ($59) won on Tuesday, up by 0.92 percent from the previous trading day. The price peaked at 76,700 won at one point during the day, a 52-week high. Shares last hit that point on Jan. 20, 2022.

The Korean tech giant landed as the second most valuable company in Asia by market capitalization, valued at $353.1 billion as of Tuesday. Taiwan's TSMC topped the list, while Hong Kong-listed Tencent had slid to third as of Dec. 22 with market capitalization of $333.4 billion. Hong Kong's markets were closed until Tuesday.

The latest trend reflects market expectations that Samsung will benefit next year from the ongoing AI boom and a cyclical upturn in the memory chip industry. Samsung Electronics plans to deploy its generative AI model, Gauss, across its product line in 2024, likely starting with the Galaxy S24 smartphones that are slated for release in January.

Memory chip business which severely hampered Samsung Electronics' profit this year is also expected to bottom out and start to recover in 2024. High-performance memory chips, including high bandwidth memory chips, are expected to speed the recovery, as the current AI boom has them in high demand.

Further U.S. sanctions on China-sourced chips also drove the upswing.

The U.S. Department of Commerce announced last week that it will launch a survey to identify U.S. companies that are using China-sourced legacy chips, expanding the scope of sanctions that were previously focused on advanced processors.

“Under the premise that the U.S. Commerce Department further sanctions China's legacy chips, it will have positive effects on emptying inventory of Samsung Electronics and SK hynix's legacy chips, such as DRAM [dynamic random access memory] and NAND flash,” said Kim Dong-won, analyst at KB Securities. “Samsung Electronics' and SK hynix's NAND businesses will turn a profit in next year's latter half, as supply will decline and prices will increase.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]