Samsung Bets on AI Chip Demand Despite Profit Dip

2025-04-30 general

Seoul, Wednesday, 30 April 2025.
Samsung anticipates strong demand for its AI-related chips. This is due to new GPU releases later this year. The forecast comes even after a 40% profit decrease. Export controls impacted high-end chip sales. The company is working to compete in the AI memory market. Despite current challenges, Samsung is optimistic about AI’s impact. The launch of enhanced HBM3E products may drive future growth. Analysts suggest that securing Nvidia as a client could significantly boost Samsung’s chip business.

Financial Performance and Market Reaction

Samsung Electronics reported a slight increase in first-quarter operating profit [3]. The increase, 0.012, was due to strong smartphone and commodity chip sales [3]. This offset underperformance in the AI chip sector [3]. First-quarter revenue grew by 10% to 79.1 trillion won [3][4]. Despite this, the chip division’s operating profit fell by 42% to 1.1 trillion won [3]. This decline was attributed to lower average selling prices and export controls affecting high-bandwidth memory (HBM) chip sales [2][5]. Following the announcement, Samsung’s stock price in Seoul experienced a slight decrease of approximately 0.5% [5].

Strategic Focus and Future Outlook

Looking ahead, Samsung plans to increase production of enhanced 12-layer HBM3E products in the second quarter [5]. This is to meet specific customer demands [5]. The company anticipates strong AI server demand driven by new GPU releases [4]. Samsung is also expanding its sales of high-value-added products [4]. These include enhanced 12-layer stacked HBM3E products and high-density DDR5 modules [4]. Despite macroeconomic uncertainties and trade tensions, Samsung expects improved performance in the second half of the year if these uncertainties decrease [3][4].

Technological Advancements and Investments

Samsung is investing heavily in research and development to maintain its competitive edge [5]. First-quarter R&D expenses increased by 16% to 9 trillion won [4][5]. The company is also planning to introduce VCT DRAM technology after its 1d nm DRAM memory process [8]. This technology aims to significantly increase storage density [8]. Additionally, Samsung is focusing on AI-driven enhancements in its consumer products [7][9]. The Neo QLED 4K QN80F TV, for example, uses an NQ4 AI Gen2 chip to optimize image and sound quality [9].

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Samsung AI Chips