China’s AI chip hunger became boon for Samsung, SK Hynix

The United States is undergoing Presidential elections later this year. The current US govt led by Joe Biden considering new restrictions on China. Due to fear of upcoming curbs, China is stockpiling AI chips from Samsung and SK Hynix.

A new report from the South China Morning Post suggests a significant increase in its imports of South Korean memory chips in the country. China is heavily stockpiling semiconductors, especially those used for AI from Samsung and SK Hynix.

The article also highlights potential US export restrictions as the reason behind this surge in chip imports from South Korea. Samsung and SK Hynix saw significant revenue growth from China in the first half of 2024.

“The soaring revenue in China echoes with the rumour that the US is reportedly mulling new measures to limit China’s access to AI memory,” Taiwanese research firm TrendForce said in a note on Friday.

Samsung, in particular, reported an 82% increase in revenue from China year on year to $24.1 billion in the first half. Notably, China accounted for about 31% of Samsung’s regional revenue of 104.9 trillion won, which grew 28% YoY.

The fear of additional export restrictions is likely driving the increased buying of overseas chips, especially those used for AI. Buying activity picked up in the second quarter and was “critical in boosting Korean suppliers’ DRAM sales”, TrendForce analyst Tom Hsu said.