* Samsung surges to over $1-trillion valuation

* Chipmakers rally as Mideast worries ease

* Asian currencies strengthen, won surges 1.6%

(Updates with afternoon trade)

By Nichiket Sunil

May 6 (Reuters) - Asian currencies gained on Wednesday as U.S. efforts

to reach a peace deal with Iran eased investor caution and fanned a chip rally,

which bumped up Samsung to the $1 trillion club and drove South Korean shares to

an all-time high.

Samsung Electronics ( SSNLF ) soared 14.4% to become the second Asian

company after Taiwan's TSMC to hit that milestone, as investors

shifted focus towards positive tech earnings that signal continued demand for

chips to power data centers that form a part of big tech's massive capital

expenditure plans.

"The AI & semiconductor supercycle is the dominant driver. Markets are

citing ongoing earnings improvement from expanded AI infrastructure investment

and a recovery in the semiconductor industry," said Inki Cho, senior financial

market strategist at Exness.

The world's second largest memory chipmaker SK Hynix also lifted

South Korea's shares, with the benchmark index ending up 6.5% at its

highest closing level. The index has advanced nearly 12% in May alone, bringing

2026 gains to over 75%, and markets believe there to be more room for the chip

rally to advance.

CW Chung, co-head of APAC equity research at Nomura, said that Samsung

continues to trade at "very low multiples" due to cyclical stock discounts, and

sees more room for the KOSPI to advance on re-rating of chip stocks, which make

up nearly half of the benchmark.

Taiwan stocks also followed suit, ending up 0.9% to their highest

close.

Firming hopes of an Iran peace deal helped appetite, after U.S. President

Donald Trump said on Tuesday he would briefly pause an operation escorting ships

through the Strait of Hormuz, which carries about a fifth of global oil, citing

"great progress" towards a comprehensive agreement with Iran.

Iran said it would only accept "a fair and comprehensive agreement" in its

negotiations with the U.S. on ending the war.

Oil prices slipped, easing some pressure off Asian currencies that have been

battered by the crisis, as higher oil import bills have fueled inflation and

growth concerns. The conflict has driven Thailand and Philippines' annual

inflation to three-year highs.

"The announcements have soothed markets again providing hope that all sides

would keep working in the direction of achieving peace," Maybank analysts said

in a note.

The South Korean won gained to 1,476.50, reaching its strongest

level since February 27.

The Malaysian ringgit rose 0.3% to 3.9470 per dollar. The country's

central bank is expected to keep its main policy rate unchanged at 2.75% on

Thursday and through the rest of the year, a Reuters poll of economists showed.

The Indonesian rupiah and the Philippine peso both stabilized

after dropping to all-time lows earlier in the week. The peso has lost more than

6% since the conflict began in late February, making it the worst showing among

Asian peers.

HIGHLIGHTS:

** Yen jumps suddenly as intervention speculation swirls

** North Korea revises constitution to drop references to unification of

Korean Peninsula

** Rivian mulls making its own lidar sensors, possibly in partnership with

Chinese firms

Asia stock

indexes and

currencies at

0709 GMT

Japan +0.93 +0.15

-

14.82

China India +0.21 -5.48 0.02 -8.01

Indonesia -0.03 -4.28 0.44 -18.02

Malaysia +0.33 +2.76 0.60 4.64

Philippines +0.03 -4.15 1.17 -1.42

S.Korea Singapore +0.28 +1.08 0.08 6.00

Taiwan +0.44 -0.10 0.91 42.04

Thailand +0.35 -3.01 1.22 19.74

(Reporting by Nichiket Sunil in Bengaluru; Editing by Sherry Jacob-Phillips and

Mrigank Dhaniwala)