Geopolitical Risks Impacting Three HBM Giants

On the evening of December 3, 2024, South Korean President Yoon Suk-yeol unexpectedly declared martial law. However, after just six hours, he lifted the measure, sparking significant market volatility. The share prices of major South Korean memory chipmakers, Samsung Electronics and SK Hynix, experienced sharp declines in overseas markets, while shares of U.S.-based Micron Technology surged by more than 5% at one point.

Following a vote in the National Assembly and expressions of concern from the United States, President Yoon lifted the martial law early on December 4. The South Korean Cabinet approved a motion at 4:30 a.m. local time to end the emergency measures. President Yoon also urged the National Assembly to cease "excessive" actions, including attempts to impeach government officials.

On December 3, Samsung Electronics' Global Depositary Receipts (GDRs) listed on the London Stock Exchange dropped by over 7% during the day, although the decline was later narrowed to 3.71%. SK Hynix's GDRs on the Frankfurt Stock Exchange saw a similar trend, plunging by 4.5% at one point, but closing down by 2.73%.

In contrast, Micron's shares saw a gain of 1.31% to close at $99.84, with an intraday high of $103.68, up 5.2%.

The global memory chip market is dominated by three major companies: Samsung, SK Hynix, and Micron. Both Samsung and SK Hynix are South Korean firms, while Micron, headquartered in the U.S., has the smallest operational scale but has made significant strides in recent years, particularly in the field of High Bandwidth Memory (HBM).

SK Hynix leads the HBM market, while Samsung is still working on improving its yield rates. Micron is quickly catching up, claiming that its HBM products consume 20% less power while offering 50% more capacity than its competitors.