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Juan Carlos López
Senior WriterAn engineer by training. A science and tech journalist by passion, vocation, and conviction. I've been writing professionally for over two decades, and I suspect I still have a long way to go. At Xataka, I write about many topics, but I mainly enjoy covering nuclear fusion, quantum physics, quantum computers, microprocessors, and TVs.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
Samsung is currently going through challenging times. Recent statements made by co-CEO Han Jong-Hee clearly outline the situation. “First and foremost, I sincerely apologise for the recent stock performance not meeting your expectations. Over the past year, our company failed to adequately respond to the rapidly evolving AI semiconductor market,” he said in a recent shareholders meeting.
Top management at Samsung recognizes its failure to make the right decisions in recent years. President Jay Lee explained in an internal message obtained by Reuters, “Our technological edge has been compromised across all our businesses. It’s hard to see that efforts are being made to drive big innovation or tackle new challenges. There are only efforts to maintain a status quo rather than shaking things up.”
Loss of Competitiveness Is a Big Problem for Samsung
Han’s statements strongly suggest that Samsung has struggled to keep pace with AI advancements. These are currently capitalized on by Taiwanese semiconductor manufacturer TSMC, which faces little competition. TSMC produces AI integrated circuits designed by companies such as Nvidia, AMD, and Broadcom. This enables it to dominate the global chip manufacturing market with a share of around 60%.
Under the leadership of C.C. Wei, TSMC reported extraordinary financial results for 2024 in mid-January, showing remarkable growth. Its revenues surged by 34% compared to 2023. In December 2024 alone, revenues exceeded $8.4 billion–a staggering 57.8% increase compared to the same month in the previous year. The primary driver behind these impressive figures is the demand for semiconductors for AI applications. TSMC’s economic performance is considerably better than that of Samsung.
Adding to Samsung’s challenges, South Korean rival SK Hynix has increasingly threatened its leadership in the memory chip market. SK Hynix has already surpassed Samsung in profits, thanks to the successful launch of its High Bandwidth Memory. It’s designed to complement GPUs for AI applications. Samsung’s hope for a return to growth now relies on its development of 2 nm chips.
However, it’s not all bad news. Japanese AI chip designer Preferred Networks and a South Korean company specializing in neural processing unit design have already placed orders for Samsung’s 2 nm lithographic nodes. According to DigiTimes Asia, mass production of 2 nm integrated circuits has already commenced at Samsung’s facilities in South Korea.
Looking ahead, it’s clear that 2025 is poised to be the year of 2 nm semiconductors. While TSMC enjoys a comfortable position, both Intel and Samsung are expected to make significant efforts to compete.
Image | Babak Habibi
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