Jenith
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Samsung's memory chip division has been its cash cow for years. It helped the company mint billions of dollars every quarter. However, that division has recently been facing intermittent losses. That is due to the combination of lower memory chip prices and the company's inability to create market-leading high-bandwidth memory (HBM) chips. Now, its chip business is largely dependent on Chinese tech firms, and that may turn into a big headache for Samsung.
https://www.imeisource.com/wp-content/uploads/2023/10/Samsung-HBM3E-Memory-Shinebolt.jpg
According to a report from Financial Times, Samsung has turned to Chinese firms to improve its suffering semiconductor chip business. There are three parts of the South Korean firm's chip business:
Right now, all these divisions are facing difficulties. The memory chip division has lost its competitive edge in the HBM memory technology and has been overtaken by rival SK Hynix. System LSI is unable to make market-leading Exynos chips and camera sensors. Samsung Foundry hasn't been able to find clients for its 3nm and newer process nodes.
Especially after the US government imposed stricter sanctions on semiconductor chip technologies that can be used by China, Chinese firms have been facing difficulties in creating cutting-edge semiconductor chips (logic and memory) because their semiconductor manufacturing technology is years away from catching up to American, European, and South Korean technology.
https://www.imeisource.com/wp-content/uploads/2024/07/Samsung-HBM3-IceBolt-Chips.jpg
Even though Samsung's HBM memory is considered second string to SK Hynix's and Micron's chips, they are still good enough for Chinese firms, as SK Hynix and Micron have sold out all their chips to big firms like AMD, Broadcom, Intel, and Nvidia.
So, Chinese firms are buying all the logic and memory chips they can from Samsung, even if they aren't market leading. For example, Samsung revealed last month that its business from China jumped 54% in value in 2024 compared to the year earlier. The company reportedly sold more than three years supply of logic dies, which are used in manufacturing AI chips to Chinese firm Baidu's semiconductor design subsidiary Kunlun.
Apparently, Samsung's HBM chips are used in Huawei’s Ascend 910 series of AI chips. The South Korean firm has also reportedly manufacatured the Core P800 AI chip for Kunlun. This chip, which was released in February uses Samsung's HBM components.
https://www.imeisource.com/wp-content/uploads/2024/04/Samsung-Semiconductor-Chip-Plant-Taylor-Texas-USA-Construction-Site.jpg
Even though the South Korean firm has invested over $40 billion to set up new chip plants and improve the existing ones in the USA, it has been unable to attract any clients for its advanced process nodes as even older clients like Google, Nvidia, and Qualcomm have flocked to TSMC for newer chips.
Now, as the Trump administration in the USA has tightened the export rules even more, Samsung might face difficulties in supplying its advanced semiconductor chips to Chinese firms. If it supplies high-performance memory chips to Chinese firms, it may risk breaking US' export rules. In a statement, Samsung said, “strictly complies with the export regulations set forth by the US government. We are unable to comment on our customer relationships.“
The post Samsung’s AI chip business now depends on Chinese firms more than ever appeared first on imeisource.
Samsung turns to China to support its semiconductor chip business
https://www.imeisource.com/wp-content/uploads/2023/10/Samsung-HBM3E-Memory-Shinebolt.jpg
According to a report from Financial Times, Samsung has turned to Chinese firms to improve its suffering semiconductor chip business. There are three parts of the South Korean firm's chip business:
- Samsung Semiconductor designs memory and storage chips such as DRAM, HBM, and NAND flash chips.
- System LSI makes logic chips (such as Exynos processors), display drivers, and camera sensors.
- Samsung Foundry manufactures all kinds of semiconductor chips for Samsung Electronics (including Samsung Semiconductor and System LSI) and other firms.
Right now, all these divisions are facing difficulties. The memory chip division has lost its competitive edge in the HBM memory technology and has been overtaken by rival SK Hynix. System LSI is unable to make market-leading Exynos chips and camera sensors. Samsung Foundry hasn't been able to find clients for its 3nm and newer process nodes.
Especially after the US government imposed stricter sanctions on semiconductor chip technologies that can be used by China, Chinese firms have been facing difficulties in creating cutting-edge semiconductor chips (logic and memory) because their semiconductor manufacturing technology is years away from catching up to American, European, and South Korean technology.
https://www.imeisource.com/wp-content/uploads/2024/07/Samsung-HBM3-IceBolt-Chips.jpg
Even though Samsung's HBM memory is considered second string to SK Hynix's and Micron's chips, they are still good enough for Chinese firms, as SK Hynix and Micron have sold out all their chips to big firms like AMD, Broadcom, Intel, and Nvidia.
So, Chinese firms are buying all the logic and memory chips they can from Samsung, even if they aren't market leading. For example, Samsung revealed last month that its business from China jumped 54% in value in 2024 compared to the year earlier. The company reportedly sold more than three years supply of logic dies, which are used in manufacturing AI chips to Chinese firm Baidu's semiconductor design subsidiary Kunlun.
Apparently, Samsung's HBM chips are used in Huawei’s Ascend 910 series of AI chips. The South Korean firm has also reportedly manufacatured the Core P800 AI chip for Kunlun. This chip, which was released in February uses Samsung's HBM components.
US' tighter chip export rules and Samsung's failed investments have become a headache for the company
https://www.imeisource.com/wp-content/uploads/2024/04/Samsung-Semiconductor-Chip-Plant-Taylor-Texas-USA-Construction-Site.jpg
Even though the South Korean firm has invested over $40 billion to set up new chip plants and improve the existing ones in the USA, it has been unable to attract any clients for its advanced process nodes as even older clients like Google, Nvidia, and Qualcomm have flocked to TSMC for newer chips.
Now, as the Trump administration in the USA has tightened the export rules even more, Samsung might face difficulties in supplying its advanced semiconductor chips to Chinese firms. If it supplies high-performance memory chips to Chinese firms, it may risk breaking US' export rules. In a statement, Samsung said, “strictly complies with the export regulations set forth by the US government. We are unable to comment on our customer relationships.“
The post Samsung’s AI chip business now depends on Chinese firms more than ever appeared first on imeisource.