Samsung Electronics expects the world’s demand for memory chips, especially for building artificial intelligence systems, will be much greater than it can currently supply. The company announced Thursday that it will now focus on producing its most advanced chips in large quantities to capitalize on this booming market.
This news marks an impressive comeback for Samsung’s main memory chip business. After struggling for several quarters and falling behind competitors in the AI chip race, the company reported record quarterly revenue from memory chips.
The world’s biggest memory chipmaker plans to significantly ramp up production of high-bandwidth memory (HBM) chips. These chips are a crucial part of AI processors. To meet the growing demand, Samsung will also sharply increase its spending next year. Kim Jaejune, a Samsung memory chip executive, told analysts, “Customers’ demand for next year will exceed our supply, even with our investment and expansion plans.” He added that demand for memory chips will be “much stronger and faster than usual,” pushing prices higher. Following these results, Samsung’s shares jumped as much as 5.3%.
Samsung’s positive outlook aligns with what its rival, SK Hynix, said earlier. SK Hynix expects a long-lasting chip “super cycle” driven by AI and has already sold out all its chips for next year. This turnaround also reflects a surprise surge in prices for regular chips. The industry is shifting production to advanced AI chips, which limits the supply of standard memory, while demand from data centers keeps rising. Kim noted that this shift is limiting the supply of memory for phones and PCs, and these limits will likely continue into next year.
Samsung’s chip division, a major moneymaker, reported an operating profit of 7 trillion won ($4.92 billion) in the third quarter, an 80% jump from last year. Its memory chip business alone brought in a record 26.7 trillion won in revenue. Samsung confirmed it is selling its current HBM3E chips to “all related customers,” suggesting it is now supplying the latest 12-layer HBM3E chips to AI chip leader Nvidia, as its competitors do.
“Looking ahead to Q4, the rapid growth of the AI industry is expected to open up new market opportunities,” Samsung stated. While some wonder if the AI boom is becoming a bubble, tech giants like OpenAI have announced multi-billion-dollar plans for AI infrastructure. Samsung, though initially slow in the AI chip race compared to SK Hynix, has benefited from the recent boom in commodity chip sales. Investors are now watching to see if Samsung can close the gap with SK Hynix in next-generation HBM4 chips. Samsung confirmed it is sending HBM4 samples to key clients and will focus on mass production next year, confident in rising demand.
