You know what they say: one multinational conglomerate's curse is another one's blessing. And boy, is Samsung getting blessed hard this week. Because as of today, Huawei is officially going on life support, i.e. its chip supply chain got chipped away. Meanwhile, as the Korea Stock Exchange wrapped up Tuesday trading moments ago, Samsung gained over $10 billion in value compared to its Friday close.
To be more specific, Samsung's current market cap sits at 407.5 trillion won – the equivalent of $345 billion. Meaning the chaebol is on the verge of fully recovering from the coronavirus losses it incurred in March. South Korean industry watchers are interpreting this week's surge in securities as a reflection of investor confidence in Samsung's ability to capitalize on Huawei's rapidly deteriorating situation.
Because either the gap between Huawei's smartphones and the Galaxy brand widens, or China's crippled juggernaut becomes one of Samsung's largest chip clients. Either way, the view from Seoul is improving with every extra day Huawei's chip supply chain remains cut off at its knees.
No such thing as stockpiling cutting-edge chips
Now, it's worth remembering Huawei has been stockpiling chips for over a year in preparation for this day. But as Samsung can attest, sometimes not even the latest tech does the job, so expecting HiSilicon's penultimate and third last to do so next year is… optimistic, to say the least.
Which just goes to show how big of a break Samsung caught this year, in spite of how hard it got hit by the still-ongoing pandemic, together with the rest of the world. Because with its biggest rival forcibly removed out of the picture, Samsung was gifted quite a bit of breathing room. And not just in terms of figuring out its chip designs, but also in regards to stabilizing operations in some key battlegrounds such as India.
