Samsung Electronics Shares Hit Lowest in Four Years Amid U.S. Tariff Concerns
On Wednesday, November 12th, 2024, Samsung Electronics shares hit its lowest in the past four years. Analysts say this decline could be due to rising concerns about new U.S. tariffs under the administration of Donald Trump.
Impact of U.S. Tariffs on Samsung
As Samsung was unable to take advantage of the growing demand for AI chips, Samsung Electronics shares have not performed well. Its share has been seeing a continuous dip in comparison to its global competitors, TSMC and Nvidia, this year, according to Reuters.
Lee Min-hee, an analyst at BNK Investment & Securities, said, “Trump’s potential tariffs on Chinese imports are seen dealing a bigger blow to Samsung, which has a higher reliance on Chinese customers than its local rival SK Hynix.”
With these new tariffs on Chinese companies under the Chips Act, Samsung Electronics may suspend its supply of 7nm and sub-7nm AI chips to Chinese clients. Although Samsung has refused to comment on the situation, the company has notified its Chinese clients of a halt in the OEM of these relevant AI chips.
Rising Tensions Over Global Tariff Threats
Greg Noh, an analyst at Hyundai Motor Securities said, “Trump has threatened to impose a universal 10% tariff on imports and 60% on Chinese goods, which would reduce demand for electronics products that use chips.” Such a move would have a direct impact on Samsung’s business and its global competitiveness.
Last week, President Yoon Suk Yeol of South Korea, also raised concerns about the Trump administration’s threat to increase tariffs on Chinese exporters. Yoon also said that higher tariffs would make the Chinese exporters to lower their prices, increasing competition for Korean chipmakers like Samsung in the global market.
Samsung Stocks Fall Amid Global Competition
Samsung Electronics shares have seen a 34% drop this year, making it the company’s worst annual performance in the past two decades. While the shares of SK Hynix have risen by 32%, U.S. chipmakers Nvidia also saw a 199% surge in their stock prices.
In early trading on November 13th, 2024, Samsung shares hit their lowest point since 24th June 2020, with a 2.5% dip to 51,700 won. Meanwhile, SK Hynix saw a 2% gain after two consecutive sessions of losses. The wider KOSPI market also dropped by 1.5% on the same day.
