The AI boom presents a significant business opportunity for Samsung, one of the world's leading suppliers of memory products, as the demand for high-performance memory solutions skyrockets due to their use in artificial intelligence semiconductors.
Samsung has already secured billions of dollars worth of deals to supply HBM3E advanced memory chips to companies like NVIDIA and AMD. Understanding the full potential of the opportunity that this segment presents, Samsung is now ramping up its efforts to cash in on the AI gold rush.
AI is where the cash is at for Samsung
The company has confirmed that it will adjust its memory chip product mix to produce more advanced memory solutions for servers and storage devices that will cater to the growing need of AI devices.
This revelation came during a conference call with analysts after the company announced its Q1 2024 financial results. Samsung will now focus its memory chip production on HBM, DDR5, and high-capacity SSD products instead of DRAMs for PCs and mobile devices.
Samsung posted solid quarterly results, beating its own forecast by increasing operating profit over tenfold to $4.8 billion, largely due to better than expected memory chip demand. That enabled Samsung to post its highest operating profit since Q3 2022.
Executives revealed during the conference call that Samsung will increase its server DRAM production by 50% this year while server SSD output will also double. The supply of HBM chips for AI applications is projected to be increased threefold compared to 2023. The following year, Samsung intends to further double HBM production as it seeks promising demand from customers for its high-bandwidth memory modules.
