Samsung’s AI Strategy to Boost Semiconductor Market Position

  • Editor
  • April 5, 2024
    Updated
Samsung

In a remarkable turn of events, Samsung Electronics Co. is set to reclaim its leadership position in the global semiconductor industry due to its strategy of artificial intelligence (AI). After a year of trailing behind in the semiconductor stock rally, Samsung is now at the forefront and fueled by growing optimism over its AI initiatives.

Investors have recognized AI’s potential to elevate the demand for NAND. Samsung’s strong grip alongside high-bandwidth memory, a segment currently led by SK Hynix Inc. This realization has prompted analysts to uplift Samsung’s price targets, anticipating AI-driven growth coupled with signs of a recovery in memory demand and pricing after a prolonged downturn.

A strategic reallocation of investments has been observed, with fund managers increasingly favoring Seoul-listed Samsung for its anticipated upswing, despite Nvidia Corp.’s stock tripling and SK Hynix’s significant gains over the past year. Samsung is now eyed for its substantial growth potential, which is previously untapped.

Samsung is making a big comeback in the computer chip market thanks to its new focus on artificial intelligence (AI). After a year of not doing as well as other companies, Samsung is now getting a lot of attention because people think AI will make more people want to buy its NAND memory chips, which Samsung sells the most of. NAND chips are important for storing data, and AI needs a lot of data storage.

People seem satisfied by this AI advancement of Samsung.

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Analysts who predict how companies will do now say Samsung’s stock price could go up because AI will need more of Samsung’s memory chips. Also, there’s hope that the market for these chips is getting better after a period when it wasn’t doing so great.

Investment managers, the people who decide where to put money in the stock market, are starting to invest more in Samsung. They think Samsung’s stock will go up more compared to other companies like Nvidia and SK Hynix, even though those companies have already seen big increases.

Christine Phillpotts from Ariel Investments mentioned they are moving their investments to Samsung because they see a big opportunity for growth that hasn’t happened yet.

Nvidia’s big boss, Jensen Huang, said good things about Samsung in March, making people think Samsung will soon make a deal to supply HBM memory, challenging SK Hynix, which currently leads in this area.

A report from Citigroup, a big bank, said that solid-state drives (SSDs), which use Samsung’s NAND chips, are becoming more popular for AI because they are much faster than old hard disk drives (HDDs). This is good news for Samsung because it means they could sell more SSDs.Analysts are now predicting Samsung’s stock could go up by 17% in the next year. Samsung also reported they recently made more money than expected, which has made people even more optimistic.

People are also excited about Samsung’s biggest comeback;

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Jae Lee from Timefolio Asset Management said Samsung is becoming more attractive to investors, but they need to be clearer about their plans for HBM memory to take advantage of the AI market fully. The demand for NAND memory has suddenly increased because big tech companies in the US are switching to SSDs for faster data processing, which could mean more profits for Samsung.

In early 2024, Samsung said their profits soared due to their computer chip business and the sales of their new Galaxy S24 smartphones. Their move to focus on artificial intelligence and its impact on the chip industry is a big deal for Samsung, showing a promising future for the company in the global market for computer chips. For more AI news visit allaboutai.com

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Dave Andre

Editor

Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.

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