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Investing.com -- Chip stocks gained ground on Thursday following reports that South Korea’s largest companies signed initial agreements to supply chips to OpenAI’s Stargate project, boosting optimism for artificial intelligence memory demand.
Micron (NASDAQ:MU) rose 1%, Advanced Micro Devices (NASDAQ:AMD) gained 3%, NVIDIA (NASDAQ:NVDA) added 1%, SanDisk (NASDAQ:SNDK) jumped 4.6%, Lam Research (NASDAQ:LRCX) increased 2%, Broadcom (NASDAQ:AVGO) climbed 3%, and Western Digital (NASDAQ:WDC) surged 4%.
The sector-wide rally came after OpenAI’s Sam Altman signed letters of intent with Samsung Electronics and SK Hynix to enlist them in his data center construction effort. According to the companies, OpenAI could need as many as 900,000 wafers per month as the Stargate project expands.
This projected demand is more than double the current global capacity for high-bandwidth memory (HBM), highlighting the massive scale of the Stargate initiative and accelerating global AI development.
However, some analysts expressed skepticism about the demand projections. KC Rajkumar of LYNX Equity Strategies said, "We would love nothing more than our favorite names such as MU, LRCX and SNDK climb higher, but for the right reasons. The 900K estimate coming from the two memory suppliers looks like a typo to us. Even if a zero were to be removed, a 90k wpm projection still would look dubious."
The OpenAI-led initiative is part of a global push to build data centers for next-generation AI tools, an effort expected to cost trillions of dollars and require substantial amounts of chips, servers, cooling systems, and electricity.