South Korea’s stock market soars as Samsung union calls off planned strike
Benchmark KOSPI rises more than 8 percent following deal to avert strike at top memory chip maker.
South Korea’s stock market has rallied following a last-minute deal to avert a strike that had threatened to disrupt the global supply of memory chips.
Samsung Electronics and its union on Wednesday night announced a tentative agreement to settle a months-long standoff over pay, avoiding a planned 18-day walkout by some 48,000 employees.
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Market sentiment around artificial intelligence (AI) also got a boost from US chip giant Nvidia’s announcement of a record $58.3bn profit in the last quarter.
South Korea’s benchmark KOSPI on Thursday soared more than 8 percent, continuing a remarkable run that has seen the index rise more than 80 percent since the start of the year.
Samsung Electronics, South Korea’s biggest firm by market capitalisation, jumped more than 7.5 percent.
SK Hynix, the main rival of Samsung Electronics in memory chips, surged more than 11 percent.
Non-tech stocks also saw large gains, with carmakers Hyundai Motor and Kia both up about 13 percent.
Samsung Electronics is the world’s biggest memory chip maker, making the South Korean tech giant a crucial player in the AI boom.
The Suwon-based company commanded more than one-third of the global DRAM market and more than one-quarter of the NAND flash market last year, according to market intelligence firm TrendForce.
Like other tech giants, Samsung Electronics has racked up record profits on the back of furious demand for chips used to power AI.
The conglomerate’s chip division saw its operating profit skyrocket nearly 50-fold in the first quarter to nearly 54 trillion won ($35bn).
Samsung’s unionised workers have for months demanded a set share of the company’s booming revenues.
Under the proposed pay deal struck on Wednesday, which requires union members’ approval, workers would be entitled to 10.5 percent of the firm’s operating profits.