Samsung Sees Slower Sales of AI Chips in the Fourth Quarter Amid US Curbs, Endures Q4 Growth
SEOUL, South Korea (February 2, 2023) – Samsung, the world’s largest chipmaker, reported a slowdown in the sales of its artificial intelligence (AI) chips in the fourth quarter, largely due to the ongoing US-China trade tensions and curbs imposed on chip exports. Despite this, the company still managed to post a growth in its overall quarterly income.
The US government’s restrictions on the export of cutting-edge chips to China, which went into effect in October, have significantly impacted Samsung’s AI chip sales. The curbs have been a major concern for the Korean tech giant, which relies heavily on the Chinese market for its AI chip exports.
In a regulatory filing, Samsung Electronics Co. Ltd. reported that its sales of AI chips, which include neuromorphic processing units (NPUs) and other specialized chips, fell by 8% year-on-year in the fourth quarter compared to the same period last year. The company’s revenue from AI chip sales stood at 2.3 trillion won ($1.9 billion) in Q4, significantly lower than the 2.5 trillion won ($2.1 billion) reported in the same quarter last year.
However, Samsung’s overall quarterly revenue increased by 3.2% year-on-year to 69.4 trillion won ($58.6 billion), driven by strong demand for its displays, memory chips, and mobile devices.
The company attributed the growth to its successful new product launches, including its flagship Galaxy S22 smartphone series and its high-end QLED TVs. Additionally, the strong demand for display panels, particularly for high-margin QLED and 8K panels, contributed to the increase in its revenue.
Despite the slower sales of AI chips, Samsung expressed optimism about its future prospects, citing the expanding scope of its AI chip business and the growing demand for edge AI, a type of AI processing that is critical for 5G and Internet of Things (IoT) applications.
"Despite the challenges posed by the US-China trade tensions, we remain confident about our ability to navigate this complex environment and capitalize on emerging trends," said a company spokesperson. "Our continued investments in research and development, partnerships with leading customers, and diversification of our product portfolio will enable us to drive long-term growth and profitability."
With the ongoing uncertainty surrounding the US-China trade relations, Samsung is likely to face continued challenges in its AI chip business. However, its diversified product portfolio and strong presence in the global market will help the company mitigate the impact and maintain its position as a leading player in the global chip industry.
