Shares of Samsung Electronics  (OTC:SSNLF) surged in Seoul and closed 2.76% higher on Tuesday, after Nvidia (NASDAQ:NVDA) CEO Jensen Huang disclosed that the South Korean giant has been selected to manufacture its latest AI chips.

Huang announced this at the GTC developer conference in California on Monday.

The CEO launched Nvidia's new AI inference processor built with technology from Groq, crediting Samsung for manufacturing the chips, which are already in production and set to ship in the second half of the year.

NVIDIA acquired chip startup Groq for $20.6 billion in December.

Huang doubled the AI demand outlook to $1 trillion at the GTC conference, reflecting the surging demand for the tech giant’s next-generation platforms, including Blackwell and Vera Rubin, as companies ramp up spending on AI infrastructure.

Samsung Gains Edge In AI Chip Race

The tech giant’s decision to choose Samsung as the manufacturer for its new AI chips comes at a time when the demand for AI hardware is reshaping the high-bandwidth memory (HBM) market. This has given South Korea’s leading chipmakers an edge over Micron Technology Inc. (NASDAQ:MU) in supplying critical components for next-generation AI processors.

Samsung has already started mass production of its HBM4 AI memory chips and is reportedly negotiating prices of about $700 per unit.

This announcement has sparked hopes of a recovery for Samsung’s foundry division, which has been suffering from annual losses in billions over the past few years. The division produces logic chips for clients, including Tesla Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Samsung’s own phone division.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.

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