Updates with European chip stocks, recasts lead, writes through, changes slug

By Heekyong Yang, Hyunjoo Jin and Danilo Masoni

SEOUL/MILAN, June 25 (Reuters) - Global chip stocks surged on Thursday after Micron Technology’s MU.O blockbuster results reignited the AI-driven rally, lifting tech shares from Seoul to Frankfurt as investors grew more confident about persistent demand and tightening supply.

Micron, a key supplier for Nvidia's NVDA.O AI chipsets alongside South Korean chipmakers, forecast quarterly profit and revenue well above expectations on Wednesday and said its customers had committed $22 billion to lock in supplies of memory chips.

The read-across was immediate in Europe, where Dutch chip-equipment maker ASML ASML.AS, the region's most valuable company, rose more than 4% following two days of heavy losses triggered by investors taking profits after a record surge.

Infineon IFXGn.DE, STMicroelectronics STMPA.PA and ASM International ASMI.AS also rose by around 4% to 6%, helping provide the main support for benchmark indices. Europe's tech index .SX8P was the biggest sectoral gainer, up more than 2%, bringing year-to-date gains to 24%.

South Korean semiconductor shares also rallied sharply, pushing the benchmark KOSPI .KS11 index up 5.4% on the day to recoup most of this week’s losses.

Samsung Electronics 005930.KS and SK Hynix 000660.KS, which together account for more than half the index's market capitalisation, rose 5.3% and 13.1%, respectively.

"Micron's earnings will likely give a sugar boost to tired tech runners," said Swissquote senior analyst Ipek Ozkardeskaya. "It was hard to find a reason to take profits after such a strong beat."

Micron's Frankfurt-listed shares rose more than 18%, tracking after-market gains on Wall Street.

The upbeat Micron outlook reinforced expectations that AI-driven demand for memory chips will remain robust despite concerns over heavy spending on AI infrastructure.

LITTLE SIGN OF DEMAND DESTRUCTION

JPMorgan said it saw little sign of demand destruction, adding that tight supply should persist and recommending investors “add on any dips”, while maintaining an overweight stance on South Korea.

"Memory shortages were triggered by the explosive need for AI factory infrastructure ... and we believe the role of memory as a strategic asset in Artificial General Intelligence remains unchanged," analysts at the U.S. bank said.

South Korea's SK Hynix 000660.KS also said on Wednesday it plans to raise up to $29.4 billion through a U.S. stock market listing, boosting investor expectations of a reduced valuation gap between the chipmaker and its smaller U.S. rival Micron.

In a rollercoaster ride, Samsung Electronics and SK Hynix have seen their market capitalisation climb above $1 trillion this year.

Samsung is now worth around $1.47 trillion, giving it a market value greater than Tesla TSLA.O or Meta META.O.

JPMorgan also described South Korea as its preferred market in the region, while raising a 12-month KOSPI target to 12,500 points. The KOSPI closed Thursday at 8,930.30.

Jeff Kim, head of research at KB Securities-Jefferies, said Samsung is likely to join SK Hynix in listing in the U.S. market through American Depositary Receipts (ADRs), giving a boost to the share prices of Korean chipmakers, which lag behind Micron in valuation.

"Chip stocks are at an inflection point. ADRs will be a strong catalyst for their valuation," he said.

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