2023-07-05 00:27:35
All about Artificial Intelligence
All about Samsung
The introduction of ChatGPT has boosted the shares of companies that produce microchips. Bets on the potential of so-called generative AI have intensified. Nvidia, the top seller of chips used in artificial intelligence, has seen its shares soar by nearly 200% this year. South Korean giant Samsung Electronics hopes to follow suit.
Samsung has the world’s biggest memory chip business and the second busiest semiconductor factory, which makes custom microchips for other companies. Foreign investors have bought $8 billion worth of Samsung shares this year on the South Korean stock exchange. This is the highest amount of foreign purchases at Samsung since 2000, according to data provided by CLSA, a Hong Kong investment firm. that they bought.
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At an event in California last week, Samsung detailed what it called “its vision for the age of AI.” Samsung believes it can capture market share from major chipmaker Taiwan Semiconductor Manufacturing Company (TSMC), but recently the trend has been reversed.
According to Counterpoint Research, a market research firm, TSMC has about 60% of total revenue in the global semiconductor market, while Samsung has only 13% — a gap that has widened since 2021, as some Samsung customers Samsung, including Nvidia, transferred their business to TSMC.
Samsung said it invested $7.4 billion in the first quarter of this year — when its profits fell by a staggering 95% — into its chip business, some of which is expected to serve the AI industry.
Construction at Samsung’s P3 semiconductor factory in Pyeongtaek, South Korea. Image: Sweet Future / Shutterstock.com
The company is expanding production at its chip manufacturing complex in Pyeongtaek, about 40 miles south of Seoul, and also at a chip factory in Texas. Over the next 20 years, Samsung plans to work with the government on a $230 billion plan to build a chip manufacturing “mega complex” in South Korea.
The optimism stems from Samsung’s memory chip business, which accounts for about half of the company’s operating profit in an average year, according to Sanjeev Rana, a senior analyst at CLSA.
Compared to traditional servers—the hardware that powers desktops and databases—servers built for artificial intelligence can require four times as much memory, called DRAM. Samsung holds about 45% of the global DRAM market. And it’s the only major memory company to invest in more production, despite the general drop in memory prices, added Rana.
Will Samsung’s efforts have an effect?
The chip industry is known for its boom and bust cycles. After a surge in demand for memory chips during the pandemic, chipmakers entered one of their worst slumps in years last fall. Samsung’s rivals in the memory chip market, including Micron Technology in the United States and SK Hynix in South Korea, have said they would cut back on production spending this year.
Some analysts believe Samsung’s down-cycle spending will pay off in the longer term when the memory sector recovers, in part because of artificial intelligence. “If demand comes back, they will be very ready,” said Rana.
Skeptics question whether Samsung can achieve the kind of indispensable role in generative AI that it has played in smartphones and high-resolution televisions. Last year, the company lost out when Nvidia chose SK Hynix as its supplier for a high-powered memory chip. expected to become a fast-growing line of business due to its prominence in future AI servers. , according to TrendForce, a market research firm. SK Hynix shares are up more than 50% this year, outpacing Samsung’s 30% gain. a competing version of HBM. The next generation of its HBM is scheduled to be launched this year, the company added.
In a statement, the company said it has been successful in many aspects of advanced semiconductor technologies and can offer customers “comprehensive solutions” in the evolving landscape of AI and other technologies. Samsung executives themselves have offered a more sober assessment.
In May, the president of Samsung’s semiconductor division, Kyung Kye-hyun, acknowledged in a lecture to university students that the company “lagged behind” TSMC by up to two years. The remarks, which circulated widely in South Korean media, were a rare admission for a company that has always prided itself on its technological leadership.
Kyung went on to promise that Samsung’s memory chips would become a “core” of AI supercomputers by 2028. “We can surpass TSMC in five years,” he said.
With information from NOW.
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