In 2024, Samsung hopes to earn an $8.8 billion profit from chips

The South Korean tech giant Samsung has earned huge profits from the Semiconductor division. It won’t be wrong if we refer to it as a cash cow for the company. However, the company is currently facing challenges in the semiconductor industry given current economic situations all around the globe. Reportedly, the company’s semiconductor division lost $10 billion in 2023.

For this year, the company aims to improve its business. According to reports, the corporation wants to turn a profit on its semiconductor business this year of 11.5 trillion won, or about $8.8 billion. All the pieces are in place for Samsung to succeed in this endeavor.

Samsung is using AI to sell memory chips

Given the supply chain problems associated with DRAM and NAND flash memory in 2023, the company’s chip division suffered losses. Over the last year, the company has worked hard to reduce wafer input and cut inventories overall. It was a good decision by the company that was reflected in the rebounding of prices from October to December 2023.

In addition to this, the demand from smartphone manufacturers and PCs for high-bandwidth memory (HBM) and computer express-link DRAMs is gradually improving. All thanks to the AI boom. Due to the AI boom, the demand for memory chips is increasing and Samsung is in the right spot to benefit from this situation. According to sources, for each pre-order of HBM, buyers are willing to pay up to $1 billion. In the global HBM market, Samsung holds a 45–47% share.

Besides this, the current inventories are a great risk for the company. The company has $15 billion worth of memory inventories. Samsung must sell these outdated models at discounted prices. It is anticipated that Samsung will persist in reducing NAND production in an attempt to drive up costs.