Could the scandal at Nvidia rattle Korea’s semiconductor industry?

Naver founder and board chair Lee Hae-jin, SK Group Chairman Chey Tae-won, Nvidia CEO Jensen Huang, President Lee Jae Myung, Samsung Electronics Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Chung Eui-sun pose for a photo during their meeting on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju on Oct. 31, 2025. (pool photo)

Uncertainty is spreading through Korea’s semiconductor and artificial intelligence industries, which rely heavily on US chipmaker Nvidia, after CEO Jensen Huang has become embroiled in a national security controversy linked to an extramarital affair.

However, industry officials are firmly insisting that this issue will not immediately affect semiconductor demand. 

Nvidia’s board of directors said in a statement issued Sunday that it was “initiating an independent investigation in light of recent reporting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort.”

 The investigation appears to have been triggered by allegations that the CEO is having an affair with Alice Huang, who is suspected of being a Chinese spy. 

However, the board added that while it “has no reason to believe that either national security or Nvidia secrets were compromised, the Board’s inquiry will examine all available information,” expressing that it “has confidence in Jensen and his leadership team.”

Despite the company’s confidence in its CEO, Wall Street is discussing the possibility of a new successor while also pointing out the risks accompanying Nvidia’s lack of a clear succession plan. 

The fact that Nvidia’s corporate governance has revolved around Jensen Huang ever since it was founded 33 years ago is seen as a source of uncertainty. 

For Korean memory companies, which have long-term supply agreements with Nvidia and which have planned roadmaps for next-generation items in tandem with the company, a possible vacuum in management could hit hard. 

Nvidia, which has led the global AI boom, is a key customer in the Korean memory market. The company is the biggest customer for SK Hynix’s high-bandwidth memory (HBM), and Samsung Electronics is also increasing its supply of memory for Nvidia’s next-generation AI accelerators. 

Nvidia is also deeply embedded in South Korea’s national AI infrastructure, with the government and major corporations promised expedited access to the company’s latest GPUs.

Another point of interest is whether this scandal will prompt the US to tighten restrictions on exports to China. 

The US Department of Commerce has already included both cutting-edge AI accelerators and downgraded chips designed to circumvent restrictions under its regulations, and export controls could be tightened depending on the results of the investigation.

Samsung Electronics’ and SK Hynix’s production lines in China could also be affected. After revoking the companies’ status as validated end users (VEU) in 2025, the US has been approving equipment imports on a year-by-year basis. Recently, media reports have indicated that the US Commerce Department is withholding approval for equipment imports to SK Hynix’s Dalian NAND plant. 

Samsung Electronics’ Xian NAND plant and Hynix’s Wuxi DRAM factory are reported to be responsible for 30 to 40 percent of each company’s general-purpose memory production. 

On the other hand, the Korean memory sector remains cautious about reading too much into the situation. 

“This issue pertains to the CEO’s private life, not one that is related to AI demand or technology. It would be a stretch to see this as something that would shake semiconductor demand,” one industry official said.

Another official noted, “The US government has long pursued a policy of putting sanctions on Chinese technology, so I do not believe that this is directly linked to the current issue. It is too early to discuss this matter.”