Samsung Electronics was once the dominant player in a type of semiconductor known as memory, putting it in a great position to capitalise on the boom of artificial intelligence, as detailed in a report by CNBC.

But the South Korean electronics giant has now fallen behind its long-time rival SK Hynix in next-generation chips that have been key components for AI silicon leader Nvidia, the CNBC report explained further.

$126 billion has been wiped off Samsung’s market value<o:p></o:p>

This resulted in Samsung’s profit dropping, around $126 billion has been wiped off its market value, according to data from S&amp;P Capital IQ, and an executive issued a rare public apology about the company’s recent financial performance.

Memory is a critical type of chip used to store data, and it can be found in a plethora of devices from smartphones to laptops. For years, Samsung was the undeniable leader in this technology, ahead of South Korean rival SK Hynix and US competitor Micron.

But as artificial intelligence (AI) applications such as OpenAI’s ChatGPT rose in popularity, the underlying infrastructure required to train the huge models they rely on became a bigger focus. Nvidia has emerged as the top player in this space with its graphics processing units (GPUs) that have become the gold standard used by technology giants for AI training.

A crucial part of that semiconductor architecture is high-bandwidth memory or HBM. This next generation of memory involves stacking multiple dynamic random access memory (DRAM) chips, but it had a small market before the AI boom, that’s where Samsung got caught out and failed to invest, the CNBC report elaborated further.

“HBM has been a very niche product ... for a long time and Samsung has not focused its resources on its development,” Kazunori Ito, director of equity research at Morningstar, told CNBC by email. “Due to the difficulty of the technology involved in stacking DRAMs and the small size of the addressable market, it was believed that the high development costs were not justified.”

SK Hynix saw this opportunity. The company aggressively launched HBM chips which were approved for use in Nvidia architecture and, in the process, the South Korean firm established a close relationship with the US giant. Nvidia’s CEO even asked the company to speed up the supply of its next-generation chip, underscoring the importance of HBM to its products.

SK Hynix posted a record quarterly operating profit in the September quarter. “With strong R&amp;D (research and development) investments and established industry partnerships, SK Hynix maintains an edge in both HBM innovation and market penetration,” Brady Wang, associated director at Counterpoint Research, told CNBC by email.

Technology giant Samsung stated in a conversation with CNBC that, in the third quarter, total HBM sales grew more than 70 per cent quarter-on-quarter. The tech giant added that the current product known as HBM3E is in mass production and generating sales. 

The South Korean tech company noted that development for its next-generation HBM4 is “underway according to plan” and that the company is targeting starting “mass production” in the second half of 2025.

Can Samsung stage a comeback?

Analysts say Samsung is falling behind competitors, particularly SK Hynix, due to underinvestment in high-bandwidth memory (HBM) and a lack of first-mover advantage. Morningstar’s Ito stated that Samsung has yet to close the HBM development gap with SK Hynix.

Samsung’s short-term recovery hinges on Nvidia’s approval, as the company must pass Nvidia’s rigorous qualification process to become a supplier. Nvidia’s approval is crucial, given its dominance in the AI chip market. A Samsung spokesperson said the company has made significant progress with HBM3E and expects to expand sales in Q4, aided by its R&amp;D and semiconductor manufacturing strengths.

Samsung Electronics was once the dominant player in a type of semiconductor known as memory, putting it in a great position to capitalise on the boom of artificial intelligence, as detailed in a report by CNBC.

Samsung Electronics was once the dominant player in a type of semiconductor known as memory, putting it in a great position to capitalise on the boom of artificial intelligence, as detailed in a report by CNBC. But the South Korean electronics giant has now fallen behind its long-time rival SK Hynix in next-generation chips that have been key components for AI silicon leader Nvidia, the CNBC report explained further. $126 billion has been wiped off Samsung’s market value This resulted in Samsung’s profit dropping, around $126 billion has been wiped off its market value, according to data from S&P Capital IQ, and an executive issued a rare public apology about the company’s recent financial performance. Memory is a critical type of chip used to store data, and it can be found in a plethora of devices from smartphones to laptops. For years, Samsung was the undeniable leader in this technology, ahead of South Korean rival SK Hynix and US competitor Micron. But as artificial intelligence (AI) applications such as OpenAI’s ChatGPT rose in popularity, the underlying infrastructure required to train the huge models they rely on became a bigger focus. Nvidia has emerged as the top player in this space with its graphics processing units (GPUs) that have become the gold standard used by technology giants for AI training. A crucial part of that semiconductor architecture is high-bandwidth memory or HBM. This next generation of memory involves stacking multiple dynamic random access memory (DRAM) chips, but it had a small market before the AI boom, that’s where Samsung got caught out and failed to invest, the CNBC report elaborated further. “HBM has been a very niche product ... for a long time and Samsung has not focused its resources on its development,” Kazunori Ito, director of equity research at Morningstar, told CNBC by email. “Due to the difficulty of the technology involved in stacking DRAMs and the small size of the addressable market, it was believed that the high development costs were not justified.” SK Hynix saw this opportunity. The company aggressively launched HBM chips which were approved for use in Nvidia architecture and, in the process, the South Korean firm established a close relationship with the US giant. Nvidia’s CEO even asked the company to speed up the supply of its next-generation chip, underscoring the importance of HBM to its products. SK Hynix posted a record quarterly operating profit in the September quarter. “With strong R&D (research and development) investments and established industry partnerships, SK Hynix maintains an edge in both HBM innovation and market penetration,” Brady Wang, associated director at Counterpoint Research, told CNBC by email. Technology giant Samsung stated in a conversation with CNBC that, in the third quarter, total HBM sales grew more than 70 per cent quarter-on-quarter. The tech giant added that the current product known as HBM3E is in mass production and generating sales. The South Korean tech company noted that development for its next-generation HBM4 is “underway according to plan” and that the company is targeting starting “mass production” in the second half of 2025. Can Samsung stage a comeback? Analysts say Samsung is falling behind competitors, particularly SK Hynix, due to underinvestment in high-bandwidth memory (HBM) and a lack of first-mover advantage. Morningstar’s Ito stated that Samsung has yet to close the HBM development gap with SK Hynix. Samsung’s short-term recovery hinges on Nvidia’s approval, as the company must pass Nvidia’s rigorous qualification process to become a supplier. Nvidia’s approval is crucial, given its dominance in the AI chip market. A Samsung spokesperson said the company has made significant progress with HBM3E and expects to expand sales in Q4, aided by its R&D and semiconductor manufacturing strengths.

How Samsung lagged in the AI race, resulting in a $126 billion loss

Samsung Electronics Co Ltd&nbsp;said on Tuesday it will shut down a CPU research division at one of its United States&nbsp;facilities, a move that analysts said dimmed prospects for the tech giant's Exynos-branded mobile chips.

Exynos mobile processor chips are considered a hallmark of the South Korean firm's attempts to reduce its reliance on memory chips and increase sales of logic chips that are used to power mobile devices and autonomous vehicles.

But the proprietary chips, which are found in Samsung's flagship Galaxy series smartphones and compete against Qualcomm Inc's&nbsp;marquee mobile processors, have struggled to find external customers.

The decision to shut down the division, which will make some 300 jobs redundant, point to challenges Samsung faces in promoting Exynos chips, analysts said.

"(Exynos) chips are not really used anywhere else and continue to lose ground in the mobile processor market, raising concerns about the company's competitiveness," said Park Sung-soon, an analyst at Cape Investment &amp; Securities.

The move has led to speculation that Samsung will use core designs from ARM or semi-custom designs. Park added that Samsung is not likely to give up the Exynos business entirely.

Samsung said it will continue to develop and produce Exynos chips regardless of the termination of CPU (central processing unit) core projects, and some of 300 affected employees could be relocated to different projects.

"Based upon a thorough assessment of our System LSI business and the need to stay competitive in the global market, Samsung has decided to transition part of our U.S.-based R&amp;D teams," it said in a statement, referring to its logic chip business.

Affected employees will mostly come from its Austin R&amp;D Center, which had been researching CPU core since 2010, while a small number of employees at its CPU project team at Advanced Computing Lab in San Jose will be let go or relocated to other divisions, a company spokeswoman said.

"Core research brought less value than expected to Samsung's entire logic chip business," said source with direct knowledge of the matter who was not authorised to speak to media on the matter and declined to be identified.

The termination of its CPU core projects comes after Samsung, the world's largest memory chipmaker, said in April that it plans to invest $116 billion in logic chips through 2030.

Samsung Electronics Co Ltd said on Tuesday it will shut down a CPU research division at one of its United States facilities, a move that analysts said dimmed prospects for the tech giant's Exynos-branded mobile chips.

Samsung Electronics Co Ltd said on Tuesday it will shut down a CPU research division at one of its United States facilities, a move that analysts said dimmed prospects for the tech giant's Exynos-branded mobile chips. Exynos mobile processor chips are considered a hallmark of the South Korean firm's attempts to reduce its reliance on memory chips and increase sales of logic chips that are used to power mobile devices and autonomous vehicles. But the proprietary chips, which are found in Samsung's flagship Galaxy series smartphones and compete against Qualcomm Inc's marquee mobile processors, have struggled to find external customers. The decision to shut down the division, which will make some 300 jobs redundant, point to challenges Samsung faces in promoting Exynos chips, analysts said. "(Exynos) chips are not really used anywhere else and continue to lose ground in the mobile processor market, raising concerns about the company's competitiveness," said Park Sung-soon, an analyst at Cape Investment & Securities. The move has led to speculation that Samsung will use core designs from ARM or semi-custom designs. Park added that Samsung is not likely to give up the Exynos business entirely. Samsung said it will continue to develop and produce Exynos chips regardless of the termination of CPU (central processing unit) core projects, and some of 300 affected employees could be relocated to different projects. "Based upon a thorough assessment of our System LSI business and the need to stay competitive in the global market, Samsung has decided to transition part of our U.S.-based R&D teams," it said in a statement, referring to its logic chip business. Affected employees will mostly come from its Austin R&D Center, which had been researching CPU core since 2010, while a small number of employees at its CPU project team at Advanced Computing Lab in San Jose will be let go or relocated to other divisions, a company spokeswoman said. "Core research brought less value than expected to Samsung's entire logic chip business," said source with direct knowledge of the matter who was not authorised to speak to media on the matter and declined to be identified. The termination of its CPU core projects comes after Samsung, the world's largest memory chipmaker, said in April that it plans to invest $116 billion in logic chips through 2030.

Samsung to shut down United States CPU research division

With the release of the second quarterly earnings call of this year, Intel has slid to the second position after Samsung. Intel had been leading the chipsets since 1993. It entered the chip industry with Pentium CPU.&nbsp;

Though the revenue figures do not indicate any loss for the company, it does affect its two decades of leading position.&nbsp; 
 
Intel&#39;s revenue accounted for $14.8 billion whereas Samsung revenue escalated to $16 billion.&nbsp;

Speculations were made since May that Samsung might take over Intel. These speculations were based on the current market consumption.

Intel supplies chips to PCs and data centres whereas Samsung is a chip provider for the smartphone market. The Current boom in the smartphone industry has resulted in a revenue rise of Samsung. And the declining demand for PCs and data centres has brought Intel down.&nbsp;

Samsung memory chips are not only used by Samsung smartphones but other company as well.&nbsp;

With the ever increasing demand for smartphones, Samsung is expected to rule the chip maker platform for the entire year.&nbsp;

However Intel may be restored to the leading position as the company is exploring different sectors of the market such as artificial intelligence, Internet of Things(IoT) and autonomous driving technology. Intel is also planning to step into the autonomous vehicle segment with Israel- based company, Mobileye. &nbsp;It is expected to sign a deal with the company by the end of the year for $15.3 billion.

&nbsp;

Intel's revenue accounted for $14.8 billion whereas Samsung revenue escalated to $16 billion

With the release of the second quarterly earnings call of this year, Intel has slid to the second position after Samsung. Intel had been leading the chipsets since 1993. It entered the chip industry with Pentium CPU. Though the revenue figures do not indicate any loss for the company, it does affect its two decades of leading position. Intel's revenue accounted for $14.8 billion whereas Samsung revenue escalated to $16 billion. Speculations were made since May that Samsung might take over Intel. These speculations were based on the current market consumption. Intel supplies chips to PCs and data centres whereas Samsung is a chip provider for the smartphone market. The Current boom in the smartphone industry has resulted in a revenue rise of Samsung. And the declining demand for PCs and data centres has brought Intel down. Samsung memory chips are not only used by Samsung smartphones but other company as well. With the ever increasing demand for smartphones, Samsung is expected to rule the chip maker platform for the entire year. However Intel may be restored to the leading position as the company is exploring different sectors of the market such as artificial intelligence, Internet of Things(IoT) and autonomous driving technology. Intel is also planning to step into the autonomous vehicle segment with Israel- based company, Mobileye. It is expected to sign a deal with the company by the end of the year for $15.3 billion.

Samsung takes over chip market, pushing aside the 24-year leader-Intel

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How Samsung lagged in the AI race, resulting in a $126 billion loss

Samsung to shut down United States CPU research division

Samsung takes over chip market, pushing aside the 24-year leader-Intel