South Korea's stock market rallied sharply on Thursday after a last-minute deal to avert a strike that threatened to disrupt global memory chip supplies.

Samsung Electronics and its union announced a tentative agreement late Wednesday to settle a months-long pay dispute, avoiding a planned 18-day walkout by some 48,000 workers.

Market sentiment around artificial intelligence (AI) also got a boost from US chip giant Nvidia's announcement of a record $58.3 billion profit in the last quarter.

The benchmark KOSPI index soared more than 8% on Thursday, continuing a remarkable run that has seen the index rise over 80% since the start of the year.

Samsung Electronics, South Korea's biggest firm by market capitalization, jumped more than 7.5%.

SK Hynix, Samsung's main rival in memory chips, surged more than 11%.

Non-tech stocks also saw large gains, with carmakers Hyundai Motor and Kia both up about 13%.

Samsung Electronics is the world's largest memory chip maker, making the South Korean tech giant a crucial player in the AI boom.

The Suwon-based company commanded over one-third of the global DRAM market and over one-quarter of the NAND flash market last year, according to market intelligence firm TrendForce.

Like other tech giants, Samsung Electronics has racked up record profits on the back of furious demand for chips used to power AI.

The conglomerate's chip division saw its operating profit skyrocket nearly 50-fold in the first quarter to nearly 54 trillion won ($35 billion).

Samsung's unionized workers have for months demanded a set share of the company's booming revenues.

Under the proposed pay deal struck on Wednesday, which requires union members' approval, workers would be entitled to 10.5% of the firm's operating profits.

Source: www.aljazeera.com