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When Samsung reported preliminary fourth-quarter earnings that missed market forecasts by a large margin, shares rose. Traders put the numbers apart and targeted as a substitute on feedback from Nvidia CEO Jensen Huang, who raised hopes of a rebound for Samsung in 2025. This comes after a market cap of almost $162 billion for Samsung in 2024, pushed by one key issue: the view that the tech big has to this point missed the AI growth that has boosted different tech firms throughout the board. The rise in Samsung’s share worth after Huang’s feedback underlines – regardless of disappointing income – how success this yr may rely upon Nvidia, whose CEO has confirmed on quite a few events that his phrases have the ability to maneuver markets. Samsung declined to remark when contacted by CNBC. Samsung’s Challenges Samsung was as soon as the dominant participant in reminiscence, a sort of semiconductor used to retailer knowledge discovered on units like laptops and smartphones. Though the South Korean titan is called a significant participant in client electronics, which makes up a big a part of its enterprise, the majority of its income come from semiconductors, notably reminiscence gross sales. Nevertheless, reminiscence costs have been depressed because of sluggish demand, which has weighed on Samsung’s profitability. The corporate stated working revenue for the quarter ended Dec. 31 could be about 6.5 trillion received ($4.47 billion), lacking LSEG estimates of seven.7 trillion received. Why Nvidia is necessary to Samsung Nvidia chips and programs go to knowledge facilities the place they’re used to coach huge synthetic intelligence fashions corresponding to these developed by OpenAI. A few of Nvidia’s programs require a part often called high-bandwidth reminiscence, or HBM. This subsequent era of reminiscence includes stacking a number of dynamic Random Entry Reminiscence (or DRAM) chips. With Samsung’s main place in conventional reminiscence, many had thought the corporate would turn out to be a significant provider to Nvidia and play a significant position within the AI growth. That has not occurred but – to this point. Samsung has fallen behind longtime rival SK Hynix in HBM, with analysts beforehand telling CNBC this was because of Samsung’s underinvestment within the know-how. SK Hynix is Nvidia’s high provider of HBM, and Nvidia has not licensed Samsung’s HBM to be used in its newest merchandise. Nevertheless, Nvidia’s Huang advised reporters final week that he was assured Samsung may redesign its HBM to satisfy the corporate’s calls for. “I’m assured that Samsung will succeed with HBM reminiscence. I’m assured that tomorrow is Wednesday,” Huang reportedly stated at his press convention, in keeping with media stories. Huang’s assist of Samsung despatched the shares larger; to this point in January they’re up about 1.7%. “Samsung’s success in 2025 depends upon NVIDIA qualification,” MS Hwang, analysis director at Counterpoint Analysis, advised CNBC by electronic mail. Samsung redesign shut? Chip producers are specializing in enhancing the efficiency of their semiconductors and decreasing power consumption. Huang’s did not elaborate on the precise components of Samsung’s HBM that want a redesign, however Counterpoint’s Hwang stated Samsung was shifting its focus from “chip measurement or price to controlling energy consumption or warmth.” “Altering the method platform will take years, however the turning level is predicted to be in 2025,” Hwang added. Though Huang stated he expects Samsung to go the Nvidia qualification — and comparatively rapidly — Kazunori Ito, director of fairness analysis at Morningstar, famous that the Nvidia CEO’s feedback didn’t present any indication of a timeline for the redesign and certification. As a substitute, it could possibly be a ploy by Huang to realize leverage over Nvidia’s different HBM suppliers, Ito stated. NVIDIA CEO Jensen Huang stated at CES that it will not be lengthy earlier than Samsung redesigns HBM and… [be] licensed, however I imagine this solely demonstrates NVIDIA’s intention so as to add Samsung to the HBM provider record to realize extra provide and pricing energy over suppliers,” Ito advised CNBC by way of electronic mail. “His feedback have not modified a lot in current months, so it is tough for us to evaluate the timeline.”
