Apple’s AI strategy gives Korean component shares a boost

Apple CEO Tim Cook delivers remarks at the start of the Apple Worldwide Developers Conference (WWDC) on June 10, 2024 in Cupertino, California. [Photo provided by Yonhap]

South Korean electronic component suppliers saw their shares surged on Wednesday following a sharp rise in Apple’s stock, which jumped 7 percent after the company unveiled its artificial intelligence (AI) strategy.

BH, a key supplier to Apple, saw its stock price soar by 3,200 won ($2.33) or 15.42 percent to 23,950 won as of 9:06 a.m. LG Innotek shares also climbed by 30,500 won or 13.29 percent to 260,000 won, while those for Jahwa rose by 1,500 won or 6.19 percent to 25,750 won.

The surge in these stocks came after Apple held its annual Worldwide Developers Conference (WWDC) 2024 on Monday (local time), where it revealed its proprietary AI system, Apple Intelligence, and announced the integration of OpenAI’s generative AI, ChatGPT, into its voice assistant, Siri.

The announcement Initially led to a 1.91 percent drop in Apple’s stock due to market concerns that the new AI features might not meet expectations. This decline also negatively impacted Korean suppliers, with BH, LG Innotek, and Jahwa shares falling by 13.36 percent, 5.56 percent, and 6.01 percent respectively.

But the market quickly rebounded as Wall Street analysts predicted that Apple’s AI enhancements would boost sales of iPhones and other devices. This optimistic outlook propelled Apple’s stock to a record high as it climbed 7.26 percent on Tuesday.

In response, Daishin Securities noted that the previous decline in LG Innotek’s stock was excessive relative to its valuation, adding the company’s performance in the second quarter of 2024 could exceed consensus estimates, and also expects further benefits from the iPhone 16 launch later in the year.