According to Zhitung Finance APP, South Korean tech giant Samsung Electronics saw its stock price rise sharply during the morning session, after this largest South Korean company unexpectedly announced a substantial share buyback plan, stating that Samsung will repurchase approximately 10 trillion won (about $7.2 billion) of its own shares over the next year. Although Samsung's stock price surged significantly due to the unexpected buyback news, it has rarely dropped nearly 30% this year as the company missed the AI boom due to slow HBM R&D progress and did not qualify as a supplier for nvidia, along with the ongoing weak demand for DRAM in consumer electronics, while one of its biggest competitors in the memory chip sector, sk hynix, has seen its stock price continue to soar since 2024.

On Monday, Samsung's stock price climbed about 8% during trading on the Seoul stock market. Last Friday, just before the announcement of the stock buyback, Samsung's stock price had been continuously declining since the unsatisfactory results were announced in October, rebounding by 7.2%. This year, due to ongoing market concerns that its memory chip business may lag behind sk hynix and micron in AI for a long time, Samsung's stock price with a market cap of $300 billion has still dropped about 30% this year.

Wall Street analysts expect that this unexpectedly announced share buyback will provide a positive catalyst for Samsung's stock price, which has long been on a downward trajectory, with some analysts pointing out that it could also help the founding family strengthen their equity control. Competitor sk hynix has seen its stock price rise sharply since 2023 due to market enthusiasm for HBM memory and enterprise-grade SSDs, significantly outperforming Samsung's stock price increase during the same period.

"The sudden announcement of the buyback surprised us; we believe Samsung's management is actively working to prevent further significant declines in the stock price," wrote jpmorgan analyst Jay Kwon in a recent research report. "We believe that important restructuring and strategic/action plans aimed at regaining leadership in storage technology will be more critical to the stock price in the medium to long term."

In the first phase of the buyback plan officially announced after the Korean stock market closed on Friday, Samsung will repurchase shares worth approximately 3 trillion won before February 2025, and will completely cancel them. The board of directors will subsequently discuss how to best utilize the remaining 7 trillion won in buyback capacity.

Analyst Sanghyun Park from Clepsydra Capital pointed out that this buyback will help the founding family of Samsung strengthen their control over the company by reducing externally held shares. He also noted that this could help them address problems related to collateral for loans associated with inheritance tax.

"Since last week, local traders have been widely discussing that Samsung might respond to the collateral pressure faced by the family with a short-term price surge," analyst Park wrote in a report on Smartkarma. "The stock may manage to stay comfortably above the margin danger zone of 53,000 won for a while."

Samsung is still striving to catch up with the global "chip foundry king" taiwan semiconductor in outsourced chip manufacturing, while also resisting fierce competitive pressure from chinese manufacturers in the weak demand markets for smart phones and other consumer electronics. Although Samsung recently stated that it has made "significant" progress in HBM memory systems, some observers believe that obtaining supply qualifications from nvidia may still take time, and management changes may occur soon.

Analyst Peter Lee from citigroup wrote in a report: "We expect a management reshuffle to possibly occur by the end of November, which may lead to significant changes in Samsung's chip foundry business. These initiatives and the share buyback should be well received by the market."

As Samsung unexpectedly launched a new share buyback plan, the south korean government and market regulators are working hard to implement policies to support the country's stock market, which is overall undervalued compared to developed country stock markets. Samsung launched a buyback plan of up to 9.3 trillion won in 2017 and approximately 11.3 trillion won in 2015.

Chip companies are proving through actual performance that only ai can drive companies into the performance expansion curve.

Despite a substantial rebound in Samsung's stock price over the last two trading days, the stock price has still dropped nearly 30% this year, mainly due to Samsung's HBM memory system missing the fervent wave of global enterprise布局 artificial intelligence due to not obtaining supply qualifications from nvidia. Recently, there are also concerns in the market that Samsung will become a casualty of the trade protectionist policies soon to be announced by usa president elect Trump.

South korea's television, smartphone, and memory chip giant Samsung is struggling for its dream of manufacturing cutting-edge chips with a process of 3nm and below and is significantly lagging behind long-time competitor sk hynix, especially in ai memory systems, particularly the HBM memory system that is bundled for comprehensive use with nvidia's high-performance ai gpu.

It is understood that Samsung acknowledged in its latest earnings report that its highest profit margin, most advanced HBM3E memory system experienced unexpected delays in obtaining certifications from major clients such as nvidia, causing the company's semiconductor business revenues to fail to meet market expectations. Meanwhile, sk hynix confirmed last week that it plans to start supplying its 12-layer HBM3E to clients such as nvidia in the fourth quarter. In addition to lagging behind sk hynix in HBM, there has also been little progress in Samsung's competition with taiwan semiconductor in the outsourced production of customized ai chips.

Artificial intelligence has completely overturned the valuation level of global chip companies. Samsung's total market cap is now not even a third of Taiwan Semiconductor, which holds the title of "King of Chip Manufacturing," the core chip outsourcing manufacturer for nvidia and AMD, the two top global AI chip giants. Just four years ago, Samsung and taiwan semiconductor were on similar levels in terms of market cap. intel, once the world's largest chip giant, is a globally highest market cap chip company that integrates chip design, manufacturing, packaging, and testing into one. However, taiwan semiconductor's current market cap is almost 10 times that of intel.

Portfolio manager Jian Shi Cortesi from Gam Investment Management in Zurich stated that on the other side of the vast AI divide, recent incredibly strong performance results from Taiwan Semiconductor and SK Hynix confirm that they are the core beneficiaries in the Asian AI field. He added that the investment fund continues to hold these two chip companies. "AI is a theme that will continue for many years, and we are still in the very early stages," emphasized the investment manager.

The two core manufacturing powers in the global chip industry—ASML Holding and Taiwan Semiconductor—showed in the third quarter that within this global high-end industry chain worth up to 530 billion dollars, the performance and stock price divergence between those chip companies riding the unprecedented wave of AI frenzy and those that have not fully capitalized on this AI boom are increasingly apparent, highlighting the market's bet on those public chip companies linked to AI, rather than those whose main business is closely tied to non-AI areas.