Samsung Seeks Chinese Support to Revive Struggling Chip Business

05 Apr, 2025

Samsung is increasingly turning to Chinese tech firms to support its struggling semiconductor business, even as it faces difficulties attracting major US clients despite multibillion-dollar investments in American chip manufacturing. The South Korean tech giant recently reported a 54% surge in chip exports to China between 2023 and 2024, driven by demand from Chinese companies stockpiling advanced AI chips amid tighter US export restrictions

In a key deal, Samsung supplied over three years’ worth of logic dies — essential components in AI chip production — to Baidu’s chip unit Kunlun. This underscores how vital Chinese customers have become to Samsung’s chipmaking division. However, the reliance on China comes at a complex time, as the company must balance business opportunities with rising geopolitical tensions between the US and China over sensitive technologies

Samsung has committed $40 billion to expanding its chip operations in Texas, supported by $6.4 billion in US federal subsidies. Yet, its US chip business struggles against competitors like Taiwan’s TSMC, which is investing at least $100 billion in US chip fabs. Meanwhile, Samsung also trails domestic rival SK Hynix in high-bandwidth memory (HBM), a critical element in AI processors, where SK Hynix dominates the supply chain for leading chipmakers like Nvidia and AMD

Despite producing HBMs considered less advanced, Samsung remains China’s largest HBM supplier, providing memory for Huawei’s Ascend 910 AI chips and partnering with Kunlun to produce the Core P800 AI chip. Future collaborations, however, have stalled due to new US export rules that restrict AI chip performance for Chinese clients

Samsung insists it complies fully with US export regulations. But as US controls tighten, experts warn that China will continue sourcing whatever advanced chips it can access — potentially accelerating Samsung’s role in supplying competitive components to Chinese tech firms.

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