Samsung Electronics

What it is

Samsung Electronics (삼성전자), incorporated in South Korea on January 13, 1969, is the world's largest maker of DRAM and NAND flash memory and one of two credible leading-edge chip foundries alongside TSMC. It sits inside the Samsung Group chaebol and is the largest South Korean company by revenue. Two primary business engines: the Device Solutions (DS) division, covering DRAM, NAND, HBM, Exynos processors, and contract foundry manufacturing; and the Device Experience (DX) division, covering Galaxy smartphones, tablets, televisions, and home appliances. The DS division generates the dominant share of Samsung's operating profit, making the company's fortunes closely tied to memory pricing cycles and AI accelerator demand.

History

Lee Byung-chul founded Samsung Group in 1938 as a trading company in Suwon, South Korea. Samsung Electronics incorporated in 1969 as the electronics manufacturing arm. The company entered DRAM production in the 1980s and, by 1993, was the world's largest memory chip maker. Samsung briefly surpassed Intel to become the largest semiconductor company by revenue in 2017, on the back of DRAM and NAND price spikes. Chairman Lee Kun-hee fell into a coma after a heart attack in 2014; his son Lee Jae-yong (Jay Y. Lee) ran the group informally through years of legal proceedings and was formally appointed executive chairman in October 2022. Samsung Foundry was restructured as a distinct DS business unit in the early 2020s, targeting external clients competing directly with TSMC.

Current state

As of mid-2026, Samsung is recovering from a 2023-2024 earnings trough. FY2025 consolidated revenue reached KRW 333.6 trillion (roughly US$233 billion), up 10.9% year-over-year, with operating profit of KRW 43.6 trillion, more than doubling from FY2024. The DS division drove the recovery: Q4 2025 alone posted KRW 44 trillion in revenue and KRW 16.4 trillion in operating profit (a 37% margin), led by HBM3E sales and higher conventional DRAM pricing. Q1 2026 accelerated further, with chip-division profit rising roughly 48-fold year-over-year as HBM4 entered mass production for Nvidia's Vera Rubin platform.

The HBM position remains contested. SK Hynix holds an estimated 60-70% of Nvidia Rubin HBM4 allocation; Samsung holds roughly 25-30%. On June 22, 2026, SK Hynix overtook Samsung Electronics in South Korean market capitalisation for the first time in 26 years, a milestone that framed the gap as structural rather than temporary. Samsung's response is the dual-engine strategy: pursue HBM share recovery through HBM4E samples delivered to Nvidia in June 2026 and a planned 2nm base-die architecture for HBM5, while winning foundry clients on overflow from TSMC's capacity constraints. Tesla's next-generation A16 chip is reportedly exclusive to Samsung Foundry's Taylor, Texas fab.

Samsung Group formally announced plans to commit 1,000 trillion won (US$646 billion) to domestic AI and semiconductor investment over 10 years, as part of the largest combined domestic investment commitment in South Korean history, presented at the Blue House on June 30, 2026.

Relationships

The most consequential relationship is with Nvidia. Nvidia certifies Samsung, SK Hynix, and Micron for Vera Rubin HBM4, but the allocation split has become the defining competition of the AI memory cycle. On the foundry side, Samsung is manufacturing for Tesla and Qualcomm as TSMC operates near capacity limits. In China, regulators opened an antitrust probe into DRAM pricing covering Samsung, SK Hynix, and Micron, with fines potentially reaching US$2.5 billion. South Korea's government is a strategic partner: the June 2026 AI megaprojects package combined Samsung and SK Hynix commitments into an 800 trillion won southwestern semiconductor cluster.

What to watch

• HBM4E qualification and Nvidia allocation outcome, determining whether Samsung reclaims share before HBM5 production begins
• Samsung Foundry ramp of the Tesla A16 at Taylor, Texas, and the Nvidia LP40 foundry decision
• China DRAM antitrust probe resolution and any resulting fine or supply restriction
• Execution pace of the 1,000 trillion won domestic investment commitment and which hyperscaler contracts anchor it
• HBM5 2nm base-die yield and Samsung's timeline to mass production relative to SK Hynix