Samsung Drives Growth Through AI Technology: Navigating Competition and Challenges in the Global Semiconductor Industry

Jakarta, INTI - Samsung Electronics, one of the world’s leading electronics giants from South Korea, recently released its third-quarter financial report for 2024. This report reveals how Samsung is responding to competitive pressures amid changing market dynamics driven by a high demand for artificial intelligence (AI) technology. Despite facing significant pressures in its semiconductor division, the company remains optimistic about the opportunities arising from digital transformation.

Third-Quarter Financial Highlights

In the third quarter of 2024, Samsung reported revenue of 79.1 trillion South Korean won (approximately USD 58 billion), up 7% compared to the previous quarter. Although there was an increase in revenue, the company's operating profit dropped to 9.18 trillion won (around USD 6.7 billion), primarily due to one-time costs and intense competition in the semiconductor market. In the chip division, operating profit declined to 3.9 trillion won from 6.5 trillion won in the previous quarter.

Samsung’s semiconductor division, which has traditionally been a core strength, is currently facing fierce competition from companies like Taiwan Semiconductor Manufacturing Company (TSMC) and SK Hynix. These companies have garnered substantial profits due to strong demand for AI chips, which has boosted their revenue. This performance gap underscores the challenges Samsung faces in capitalizing on the growing need for premium AI chips.

Samsung’s AI-Focused Strategy

To confront this competition, Samsung has announced a focus on developing high-end chips and AI-related technology as part of its strategy to increase profitability. According to Samsung Electronics’ Vice Chairman Jun Young-hyun, the company prefers to build fundamental competitiveness rather than pursuing short-term fixes. Samsung is targeting an increase in the sales of High Bandwidth Memory (HBM) chips and high-density products essential for AI applications.

Samsung expressed that demand for AI technology will be a major growth driver for the semiconductor industry in the future. In the upcoming quarter, while memory demand for mobile devices and PCs may weaken, AI is expected to maintain demand at a stable level.

Opportunities in the Premium Market

Samsung is also aiming to expand the use of advanced technologies, such as its 2-nanometer Gate-All-Around (GAA) process, to strengthen its position in the premium market. This technology process is designed to produce high-performance, power-efficient products, which is expected to attract major clients and ensure sustainable growth in the semiconductor market.

Developments in Other Sectors

Beyond semiconductors, Samsung is expanding its business in other tech sectors related to AI, such as the premium display market through Samsung Display Corporation (SDC), which focuses on OLED technology for AI-enabled devices. Other business divisions, such as System LSI, are capitalizing on the AI momentum in devices by providing system-on-chips (SoCs) for flagship products.