Samsung Warns of Slowing AI Chip Sales Due to US Export Restrictions

Samsung has warned that its artificial intelligence chipset sales are expected to slow down in the current quarter due to US export restrictions on China.

The advanced chips used for AI have been a key focus in the weak memory chip market. NVIDIA is one of the main players in AI GPUs, but it still primarily relies on SK Hynix for its high-bandwidth memory (HBM) chipsets.

On the other side, Samsung has struggled to meet Nvidia’s HBM requirements. The US restrictions on HBM chip sales to China are expected to negatively impact Samsung, as approximately 20% of its HBM sales went to Chinese customers.

The Korean tech giant started sales of 8-layer and 12-layer HBM3E products in the third quarter and also announced that it is planning to launch the improved HBM3E products in March. Nvidia CEO Jensen Huang revealed this month that Samsung has to “engineer a new design” to supply HBM chips to his company.

Samsung is gearing up to supply its HBM chips to Nvidia, and the supply constraints for GPUs have led to delays in projects from some customers, which has weighed on demand for memory chips.

Noticeably, Samsung’s Q4 operating profit shot down 29% to 6.5 trillion won, and the company is also expecting the smartphone market to slow down this year due to global uncertainties such as US policy changes and inflation.

The brand also anticipated memory market demand to recover in Q2 this year, and its performance hinges on supplying 12-layer HBM3E chips to Nvidia. While SK Hynix and TSMC reported record profits due to the efficient AI boom, surpassing Samsung’s. It will be interesting to see how Samsung will deal with this scene and manage its sales in the tech market.

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