SEOUL – Samsung Electronics has reached a US$1 trillion (S$1.28 trillion) market valuation after booming demand for chips used in artificial intelligence saw the world’s largest memory maker’s stock more than quadruple over the past year.
The milestone came as the South Korean company’s shares rallied as much as 12 per cent on May 6, making it only the second Asian firm after Taiwan Semiconductor Manufacturing Co. (TSMC) to hit the mark.
Samsung’s gains boosted the Kospi benchmark above the 7,000 level for the first time. It was up 5.4 per cent at 7,319.11 at 10.50am in Seoul.
Samsung, alongside memory peer SK Hynix and TSMC, sits at the heart of a transformation that has made Asia a cornerstone of the global AI ecosystem, pairing chipmaking dominance with expanding data infrastructure. That shift has fuelled a powerful rally in regional tech stocks – SK Hynix and TSMC also reached record highs in May – as investors bet on sustained demand for advanced chips and computing capacity.
“The trillion dollar threshold carries material weight beyond the symbolism,” said Dave Mazza, chief executive officer at Roundhill Investments. “More broadly, it reflects a market judgment that memory’s role in the AI infrastructure stack is structural, not cyclical.”
Just days ago, Samsung’s semiconductor arm brought in historic profit over the March quarter beating expectations with a 48-fold jump as AI data centre orders delivered hefty margins. Analysts expect the division to build on its record-breaking profit over the next several quarters as contract prices continue their steep upward trajectory amid limited supply.
Meanwhile, Apple has held exploratory discussions about using Samsung to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner TSMC.
“If investors do some work on Samsung Electronics we think they will conclude that the investment opportunity is attractive even if they have missed its performance up until now,” said Sam Konrad, investment manager at Jupiter Asset Management. “The memory market is currently undersupplied, and Samsung said that 2027 will see tighter supply and demand than 2026, so prices for NAND and DRAM are likely to continue rising.”
That said, Samsung is facing some challenges too. The chip unit’s earnings growth contrasts with declines in Samsung’s mobile and displays operations, which are fighting rising materials and components prices. The profits generated by the AI boom are also prompting Samsung employees to demand a bigger share, with workers threatening an 18-day general strike later in May.
Still, the stock is expected to rise around 30 per cent over the next 12 months, according to sell-side analyst estimates compiled by Bloomberg. It is trading at just 5.9 times one-year forward earnings, down from 14.4 times in October.
The dizzying gains in Samsung and SK Hynix shares – which together command a weightage of more than 43 per cent in the benchmark Kospi index, have helped make South Korea one of the world’s hottest markets. The benchmark rose as much as 5.8 per cent on May 6, and a jump in futures prompted the bourse to halt program buying. BLOOMBERG
