How Samsung Missed the AI Moment

Semiconductor Industry Dynamics - Samsung faces increasing competition and is struggling to keep pace with the latest technology, particularly in the high-bandwidth memory (HBM) sector [10] - SK Hynix has emerged as a major rival, securing contracts with Nvidia and achieving record profits due to its dominance in HBM [14][15] - Samsung was overtaken by SK Hynix in the DRAM market, ending its three-decade lead [16] - TSMC dominates the foundry market, putting intense pressure on Samsung's foundry business, with TSMC controlling approximately two-thirds (66%) of the global market while Samsung holds about 8% market share [22] Financial Performance & Market Position - Samsung's chip profits have tumbled, with the semiconductor division reporting an operating profit of 400 billion won, missing analyst projections of 273 trillion won (2730 billion won) [2] - Samsung shares have decreased in value since their 2020 peak and tanked in 2024, while SK Hynix's shares have surged [3] - SK Hynix provides approximately 20% of Nvidia's cost of goods sold, while Samsung accounts for about 1% [16] Strategic Challenges & Opportunities - Samsung needs to win over Nvidia to become a contractor, as its chips have not passed Nvidia's required tests [19] - Samsung is making an all-out push into next-generation HBM4 to close the gap with SK Hynix [21] - Samsung has reached a $165 billion (16500 million) pact with Tesla to produce its next-generation AI semiconductor [23] South Korean Economy Impact - Samsung is the biggest company in South Korea, contributing significantly to the economy, accounting for about one-fifth (20%) of the country's exports [6] - The company's struggles threaten its national identity, as the South Korean population relies heavily on it [3]