According to a report by South Korea's "Chungang Ilbo" on the 10th, as NVIDIA initiates an investigation into its CEO Jensen Huang, South Korean chip manufacturers are "on high alert," preparing to cope with potential impacts. The report states that Jensen Huang's personal extramarital affair has already caused "ripples of uncertainty" within South Korea's semiconductor industry, and any possible changes in NVIDIA's leadership could have a profound effect on South Korean chip manufacturers and the broader artificial intelligence (AI) industry ecosystem.

Reports indicate that in recent years, NVIDIA's collaboration with Korean companies has expanded beyond memory chips to include key areas such as data centers, robotics, and autonomous driving. Although there have been no instances of project halts or supply disruptions so far, Korean media is concerned that if the investigation prolongs and affects NVIDIA's investment and business decisions, Korean companies that are closely tied to NVIDIA may suffer a chain reaction of impacts. This sudden incident has also exposed the long-standing vulnerability of Korea's AI industry, which relies heavily on a single giant.

Uncertainty adds to South Korea's semiconductor market

According to Yonhap News, the U.S. Congress has requested that Jensen Huang attend a closed-door briefing on the 18th to explain the situation. In recent days, this incident has continued to cause fluctuations in the stock market. NVIDIA's stock price fell by 4.27% on the 9th and another 5.47% on the 10th, experiencing two consecutive days of significant declines, with its market value evaporating by about $400 billion at one point.

Seven exchange-traded open-end index funds in South Korea with names containing "NVIDIA" fell across the board on the 9th, with the largest decline approaching 2%. According to South Korean news agency News1, this turmoil once again cast a shadow over South Korean semiconductor stocks, which had just experienced a sharp drop. Previously, due to market concerns about potential increased AI regulation after the U.S. mid-term elections, Samsung Electronics and SK Hynix had seen consecutive four-day declines. Although South Korean stock market semiconductor companies rebounded on the 11th, market confidence remains fragile after recent continuous selling by foreign investors.

The South Korean securities industry is more concerned that the "NVIDIA incident" could trigger a new round of semiconductor export controls. Park Si-yeon, an analyst at Hanwha Investment & Securities, stated that what truly affects South Korea's supply chain is not the personal lives of executives, but whether the United States will introduce new export restrictions, and whether there are any changes to NVIDIA's customers and contracts. Both Samsung Electronics and SK Hynix have production bases in China, and their equipment imports and production line upgrades are already subject to U.S. export licensing policies. If the U.S. further tightens these regulations, the operational burden on South Korean companies could increase even more.

The Hankook Ilbo reported that NVIDIA has long relied on the personal leadership of Jensen Huang. Once Jensen Huang steps down, NVIDIA's major business decisions and long-term cooperation with Korean companies could be affected. NVIDIA is an important customer of SK Hynix, and Samsung Electronics is also supplying its latest generation of high-bandwidth memory (HBM) to NVIDIA, as well as discussing subsequent product supplies.

According to a report by the Central Daily, SK Hynix signed a multi-year technology agreement with NVIDIA in June this year to jointly develop the memory required for the next generation of AI chips. South Korean financial media EBN stated that HBM needs to carry out customized development and verification for customers' AI chips, and it is difficult to quickly re-supply the produced products to other companies. If NVIDIA adjusts its procurement or product development plans, the production schedules of South Korean companies may also be disrupted.

According to an analysis by South Korean publication "Seoul Economic", the "NVIDIA incident" may provide an opportunity for competitors such as AMD and Google to expand their market share, while South Korean memory chip companies will also face new operational pressures. Samsung Electronics is actively expanding its customer base to include AMD and Broadcom, whereas SK Hynix, which relies heavily on NVIDIA's memory chip orders, is at risk of experiencing revenue declines. Lee Yong-ho, a researcher at NH Investment Securities in South Korea, believes that prolonged investigations could slow down NVIDIA's investment decisions and even delay product shipments and the launch of new products, affecting the entire South Korean semiconductor industry.

AI Infrastructure construction implicated

NVIDIA's operational risks not only affect semiconductor orders in South Korea but may also impact the infrastructure construction of AI and other cooperation projects. According to Yonhap News, NVIDIA completed an investment in South Korea's internet giant NAVER on the 6th and acquired a 4.13% stake, becoming its third-largest shareholder. Both parties are working with other partners to advance a $9 billion AI computing infrastructure project.

Reports indicate that if NVIDIA adjusts the chip delivery times or supply quantities, NAVER data centers may face risks such as delayed activation and reduced computing power availability. There have also been changes to NVIDIA's activities in South Korea. Jensen Huang (the eldest daughter of NVIDIA's senior director), who was scheduled to attend the “AI Day Seoul” event in Seoul, suddenly canceled her visit to South Korea, and her meeting with Korean senior officials was likewise cancelled.

However, during the event in Seoul, NVIDIA announced several advancements in collaboration with South Korea. Samsung Electronics, SK Hynix, Hyundai Motor, and LG Electronics are also using NVIDIA technology in areas such as semiconductor manufacturing and robot development. According to Yonhap News, there are no signs of disruptions in these projects at present.

South Korean President Lee Jae-myung previously stated his desire to build South Korea into a leading force in the field of artificial intelligence globally. In 2025, NVIDIA reached a supply contract with the South Korean government and four South Korean companies for approximately 260,000 graphics processing units (_GPU) to support the construction of South Korea's AI infrastructure. The South Korean government currently believes that the established _GPU supply will not be immediately impacted.

"For Korean companies, the consequences are devastating."

A commentary in the Hankook Ilbo stated that this incident has exposed South Korea's high dependence on NVIDIA in the AI industry. Last October, a cooperation plan announced by the South Korean government and major companies revealed that NVIDIA has become deeply integrated into South Korea's AI industrial chain, from semiconductor manufacturing to cloud computing, which may lead to the operational risks of a single company spreading across multiple industries in South Korea.

Jeong Hyeong-kun, a researcher at the Korea Institute for International Economic Policy, told the Central Daily that the real risk to South Korea's semiconductor industry lies in its increasing dependence on a single company and its ecosystem in the supply chain. South Korean media reports that the South Korean government and companies should review the procurement contracts and supply progress of GPU, and accelerate the diversification of partners to reduce their over-reliance on NVIDIA.

Professor Lee Jong-hwan from the Department of System Semiconductor Engineering at Sangmyung University stated, "If NVIDIA's reputation declines and as a result the semiconductor market shrinks, then the consequences could be devastating for Korean companies."

Source: Global Times