Samsung (KRW:005930) is in focus after the U.S. expanded its chip curbs to Asia.
005930 Samsung Weekly Chart
The price of Samsung is testing the 2022 low at 51,900 and that could create a medium-term low in the stock.
The latest U.S. export controls on shipments of high-bandwidth memory (HBM) chips to China are expected to have a limited impact on most Korean chipmakers. But experts believe that restrictions could result in lost opportunities to acquire new customers.
The U.S. Bureau of Industry and Security said Monday a new set of measures banning the export of critical chips and chip equipment. The cutting-edge chips are critical to artificial intelligence applications, for AI training and inference at scale.
The U.S. government enforces its export controls based on the Foreign Direct Product Rule or FDPR, which gives it the power to prohibit the sale of products made using American technology. The FDPR has been used over the last year to slow China’s technological progress.
Overall, the U.S. regulations are expected to be limited as most HBMs are sold to the U.S. But Samsung is likely to be affected the most, reportedly generating about 20% of its HBM chip sales from China, industry officials said.
The news is another blow to the company with the stock probing 2022 lows, but there is possibility to find a low here if analysts believe the bad news is already priced into the stock.
The financial arms of Samsung Group are still earning more than the country’s major banking groups in the current environment. Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, and Samsung Securities logged a net income of 4.6 trillion won ($3.3 billion) in the first nine months.
