Samsung Electronics shares increased on Tuesday after Nvidia confirmed the company is producing new artificial intelligence chips for it.
The stock rose by more than 5% in early trading, and investors reacted quickly after Nvidia’s chief executive, Jensen Huang, spoke at the company’s GTC developer conference in California.
“I want to thank Samsung who manufactures the Groq LP30 chip for us and they’re cranking as hard as they can,” he said.
He added that the chips are already in production and will be shipped in the second half of the year.
That single update has changed the mindset around Samsung’s chipmaking business. For years, its foundry division has faced challenges, posting heavy losses as it tried to compete with bigger companies. Now, there are new signs of recovery.
At the same event, Samsung displayed the Nvidia chips built on its 4-nanometre process. It also introduced its latest high-bandwidth memory, aimed at handling growing demand from AI systems.
This points to a good working relationship between the two companies, especially as demand for AI chips continues to grow.
Experts say the deal could help Samsung’s foundry unit move closer to breaking even, though there are still challenges. Demand in the mobile market is still weak, and high memory prices could limit profits in the near term.
Even so, the market response shows good reports. Samsung shares were up about 4.3% at one point during the session, after earlier hitting stronger results. The index also moved higher, but not by as much.
There is more to watch this week. AMD chief executive Lisa Su is expected to visit South Korea, where she will meet Samsung chairman Jay Y. Lee.
Her visit is also expected to include a tour of Samsung’s chip plant in Pyeongtaek and it would be her first trip to the country since becoming CEO in 2014.
