It is hoped that Nvidia’s jump in sales is a sign of greater industry demand for AI processors and will result in a boom in exports for its suppliers, such as SK Hynix Inc., and that Nvidia’s better-than-expected earnings for AI chip maker Nvidia Corp. will be the trigger that the high-tech Korean market is looking for.
Despite the Fed’s confrontational remarks, the won increased versus the dollar by 0.3% on Monday. Due to declining exports, dismal economic development in China, and rising yields in the US, the currency has fared the worst in Asia this month. The value of the yen against the dollar dropped 3.5% in August.
Even with Nvidia’s success, the slowing in China’s economy—clearly Korea’s biggest export market—remains a hurdle for the victory. If China’s manufacturing PMI for August stays in the red for the fifth consecutive month, pressure on the currency might start up again as soon as this week.
According to Min Ju Kang, senior economist at ING Bank NV in Seoul, “the Nvidia surprise is an event that will affect the market, at least in the short term, until we hear more discouraging data or news about a slowdown in economic growth in China.”