Samsung Narrows Memory Chip Gap with SK Hynix as AI Demand Booms
Samsung Electronics is closing the profit gap with rival SK Hynix, fueled by a surging market for AI semiconductors. After four straight quarters of losses, Samsung’s chip division is projected to post a 4.6 trillion won ($3.3 billion) operating profit for Q2, overtaking SK Hynix’s estimated 3.4 trillion won.
Key Takeaways
- Samsung’s chip division returns to profit after four quarters of losses, driven by higher memory prices and AI chip demand.
- The profit gap with SK Hynix is narrowing, though SK Hynix maintains a lead in the critical HBM market for AI.
- HBM chip market is exploding, forecast to grow from $4.8 billion in 2023 to $14 billion this year.
- Both giants benefit from a broad recovery in DRAM and NAND flash prices.
HBM: The AI Chip Battleground
SK Hynix has been the dominant player, being the top supplier of High Bandwidth Memory (HBM) chips to Nvidia for AI processors. The company has already sold out its 2024 HBM production and most of its 2025 supply.
Samsung is catching up, having begun mass production of the latest HBM3E chips in April, now under verification by Nvidia. Analysts expect Samsung to start supplying Nvidia in the third quarter, a key move to challenge SK Hynix’s lead.
“Samsung is expected to start supplying HBM3E chips to Nvidia in the third quarter, which will help it narrow the gap with SK Hynix,” said Kim Yang-jae, an analyst at Kiwoom Securities.
Broad Market Recovery Lifts All Boats
The turnaround isn’t limited to AI. A recovery in traditional memory chips (DRAM and NAND flash) used in smartphones and PCs is boosting both companies. DRAM prices rose 13-18% in Q2, while NAND flash prices jumped 15-20%.
Analysts attribute the faster-than-expected recovery to strategic production cuts by major chipmakers and relentless AI-driven demand.
“The memory chip market is recovering faster than expected thanks to production cuts and demand for AI-related chips,” said Kim Dong-won, an analyst at KB Securities.
Earnings Outlook
For Q2, Samsung’s overall operating profit is forecast at 8.8 trillion won, a massive jump from 670 billion won a year ago. SK Hynix is expected to report a 4.4 trillion won profit, rebounding from a 2.9 trillion won loss last year. Both companies will release official earnings later this month.
