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US tariffs and lagging AI chip sales push Samsung to 4-year stock market low, investors worried

South Korea's Samsung Electronics shares sank to a four-year low on November 13.  This news came as Samsung was pushed down by worries over tariffs in the event of Donald Trump's return to the White House and as its relative lag in AI chip development grew.  The world's largest memory chipmaker's stock plunged by 34% this year. This will be the worst performance of the tech giant in over two decades.

Samsung shares slid as much as 2.5% in early trading, striking 51,700 won, the lowest since June 2020. At 0126 GMT, shares had slipped by 2.1%, which is a fourth consecutive decline in a row. The broader KOSPI market index fell by 1.5%.

Analysts attribute the drop to several factors. Samsung's reliance on customers in China makes it vulnerable to Trump's proposed tariffs on Chinese imports. "Trump's potential tariffs on Chinese imports are seen dealing a bigger blow to Samsung, which has a higher reliance on Chinese customers than its local rival SK Hynix," said Lee Min-hee, an analyst at BNK Investment & Securities. Such tariffs can go as high as 60% on Chinese goods, which may reduce the demand for electronics products that have Samsung's chips in them.

While SK Hynix has managed to edge ahead in terms of outperforming its rival, Samsung. The firm has focused most of its sales on high-end AI server chips going to US-based customers like Nvidia. Shares in SK Hynix have gained 32% this year. For Nvidia, shares that are dominant in the AI chip market have jumped by 199% so far this year.

According to a Reuters report, Hyundai Motor Securities analyst Greg Noh said broader impacts are also felt because of Trump's proposed tariff plans. He stated that Trump has threatened to impose a universal 10% tariff on imports and 60% on Chinese goods, which would reduce demand for electronics that use chips.

South Korean President Yoon Suk Yeol recently expressed concerns over the impact on the country's chipmakers. He said Chinese competitors may retaliate with sharply lower export prices, capturing some of the global market shares that South Korean firms enjoyed before the tariffs.

Shares of Samsung declined further while SK Hynix gained 2% on November 13 after a two-day losing streak. However, the sizzling red geopolitics and competitive forces would continue to impact the chip market in forming an uncertain future.

Samsung's underperformance revealed the company's inability to keep up with close competitors in the burgeoning AI chip business. The more the world was gearing up for AI technology, the stronger the competition that seemed to be skipping around its need to become a market leader.