Samsung's Big Rebound Hides a Problem: It's Losing the Chip Race
Samsung's 2024 revenue recovery to KRW 300.9 trillion masks growing competitive pressures, as SK Hynix surpassed Samsung's semiconductor operating profit through HBM dominance while Samsung's foundry utilization fell below 50% amid TSMC's market share expansion.
- 1Samsung's 2024 operating profit of KRW 32.7 trillion recovered from 2023 lows but declined sequentially from 10.44 trillion won in Q2 to 6.5 trillion won in Q4
- 2SK Hynix achieved 23.47 trillion won semiconductor operating profit in 2024 versus Samsung's 15.1 trillion won despite lower sales, driven by 57-70% HBM market share
- 3Samsung's memory operations ran at 100% utilization in 2024 while the global memory market reached $170 billion according to Yole Group
- 4Samsung's foundry utilization fell below 50% in 2024 while TSMC expanded market share to 34% of the foundry industry
- 5Samsung delayed mass production of its 1nm node by approximately two years and postponed U.S. Taylor facility equipment introduction from end of 2024 to after 2026
The Full Investigation
6 sections · 5 min read
Samsung's Quarterly Financial Performance
Samsung reported full-year 2024 revenue of KRW 300.9 trillion with operating profit of KRW 32.7 trillion, marking a substantial recovery from 2023 levels. The company's quarterly results showed significant volatility throughout the year.
Second-quarter 2024 results exceeded analyst expectations, with revenue of 74.07 trillion won versus a 73.74 trillion won estimate, according to CNBC. Operating profit reached 10.44 trillion won, beating the 9.53 trillion won estimate and representing a 1,458.2% year-over-year increase.
However, the trajectory reversed in subsequent quarters. Third-quarter sales reached 79.1 trillion won with operating profit of 9.18 trillion won. Samsung attributed the quarter-over-quarter profit decline to reduced inventory valuation reversal and one-time costs including incentive provisions. Currency effects from dollar weakness had approximately 0.5 trillion won negative impact on Q3 operating profit.
Fourth-quarter revenue reached 75.8 trillion won with operating profit of 6.5 trillion won. Operating profit decreased 2.7 trillion won quarter-over-quarter due to soft market conditions and increased R&D expenditures, according to Samsung.
Open: Samsung does not publicly disclose foundry-specific utilization rates or financial performance separately from its broader Device Solutions division, limiting independent verification of sub-50% foundry utilization reported by Semiecosystem; The precise timeline and customer commitments for Samsung's delayed 1nm process node remain unclear, as does the specific technical nature of the reported performance gap with TSMC
Memory Division Performance and Market Positioning
Samsung's Device Solutions (DS) Division reported third-quarter 2024 revenue of 29.27 trillion won with operating profit of 3.86 trillion won. According to e4ds news, Samsung's 2024 semiconductor sales totaled 111.1 trillion won with operating profit of 15.1 trillion won.
In a significant competitive shift, e4ds news reports that SK Hynix achieved 2024 sales of 66.193 trillion won with operating profit of 23.4673 trillion won, surpassing Samsung's semiconductor operating profit despite lower sales according to e4ds news. This margin advantage reflects SK Hynix's dominance in high bandwidth memory (HBM), the fastest-growing segment of the memory market.
According to Semiecosystem citing Counterpoint, SK Hynix dominated the HBM market with 70% market share while Samsung continued to struggle. CNBC reported citing Counterpoint that SK Hynix held 57% HBM market revenue share compared to Samsung's 22% in the third quarter of 2025; this figure was reported in January 2026 and falls outside the primary research window, included as later context. Semiecosystem also reports that SK Hynix overtook Samsung in overall DRAM market share in the first quarter of 2025.
Despite these competitive pressures, Samsung's memory operations showed strong capacity utilization. The company reported that DS Division Memory utilization reached 100.0% in 2024.
Open: Samsung does not publicly disclose foundry-specific utilization rates or financial performance separately from its broader Device Solutions division, limiting independent verification of sub-50% foundry utilization reported by Semiecosystem; The precise timeline and customer commitments for Samsung's delayed 1nm process node remain unclear, as does the specific technical nature of the reported performance gap with TSMC
Global Semiconductor Market Recovery
According to Yole Group, the 2024 global memory market revenue reached $170 billion, with DRAM at approximately $97 billion and NAND at approximately $68 billion. Yole projects the 2025 memory market will reach $200 billion with DRAM at approximately $129 billion and NAND at approximately $65 billion.
TechInsights reports that HBM demand grew over 200% in 2024, driving much of the memory market recovery. Yole Group projects that HBM revenue will nearly double in 2025 to approximately $34 billion.
According to Patent PC, the recovery followed a period of deliberate supply discipline. Memory manufacturers cut capital expenditures 30-40% year-over-year in 2023 to prevent oversupply and stabilize pricing. Patent PC reports that DRAM supply growth in 2024 was limited to 12-16% year-over-year despite demand recovery.
In the foundry sector, TSMC reported in its 2024 annual report that it accounted for 34% of the foundry industry (as TSMC defines the market scope), an increase from 28% in 2023. TSMC's HPC platform represented 51% of its revenue in 2024, reflecting strong demand for AI and high-performance computing chips.
Open: The breakdown between conventional DRAM/NAND and HBM within Samsung's memory operating profit is not disclosed, making it difficult to assess the financial impact of its HBM market share gap with SK Hynix
Samsung Foundry Challenges
According to Semiecosystem, Samsung foundry fourth-quarter 2024 earnings decreased due to lower utilization and higher R&D expenses. Samsung foundry utilization fell below 50% in 2024, according to Semiecosystem, contrasting with the company's reported 100% memory utilization; Samsung does not publicly disclose foundry-specific utilization rates.
According to Design & Reuse, Samsung foundry yield rates for 2nm and 3nm both exceed 40%, sufficient for commercial production, but overall chip performance including power efficiency falls short compared to TSMC. Design & Reuse reports that Samsung delayed mass production of its 1nm node by approximately two years.
AnySilicon reports — a claim that remains unverified by independent sources and that Samsung has not publicly addressed — that Samsung's 3nm process has yet to reach mass production-ready yields impacting reliability. According to AnySilicon, Samsung's U.S. foundry facility in Taylor delayed equipment introduction from end of 2024 to after 2026.
Open: Samsung does not publicly disclose foundry-specific utilization rates or financial performance separately from its broader Device Solutions division, limiting independent verification of sub-50% foundry utilization reported by Semiecosystem; The precise timeline and customer commitments for Samsung's delayed 1nm process node remain unclear, as does the specific technical nature of the reported performance gap with TSMC
Inventory Management and Market Dynamics
Samsung's inventory management showed improvement throughout the period. According to Chosun, Samsung DS division third-quarter 2025 inventory was 27.0 trillion won, down from 29.7 trillion won at end-2024 and 31.0 trillion won at end-2023. Finished goods inventory fell to 3.4 trillion won from 6.5 trillion won at end-2023, according to Chosun.
Samsung's official 2024 Business Report shows total inventory as of December 31, 2024 was 56.7 trillion won acquisition cost with 5.0 trillion won in valuation reserves, resulting in a net balance of 51.8 trillion won.
Chosun reports that global DRAM supplier average inventory hit a record low of 3.3 weeks in the third quarter of 2025, indicating tight supply conditions across the industry. This inventory discipline, combined with recovering demand, supported the pricing environment that enabled Samsung's earnings recovery.
Note: Several data points extending into 2025 and reported in late 2025/early 2026 (including Chosun Q3 2025 inventory figures, Semiecosystem DRAM Q1 2025 share, and CNBC Q3 2025 HBM share) fall outside the primary research window ending January 31, 2025, and are included as subsequent context.
Open: The breakdown between conventional DRAM/NAND and HBM within Samsung's memory operating profit is not disclosed, making it difficult to assess the financial impact of its HBM market share gap with SK Hynix
Foundry Challenges in Context of Overall Earnings
The reported foundry challenges — utilization below 50% according to Semiecosystem, yield and performance gaps reported by Design & Reuse and AnySilicon, and sequential profit declines in Q4 2024 — occurred alongside Samsung's memory recovery: 2024 semiconductor operating profit of 15.1 trillion won (according to e4ds news) and 100% memory utilization.
Samsung does not publicly disclose separate financial performance for its foundry business versus its memory business within the Device Solutions division. Without this segment breakdown, the sources examined do not allow a precise quantitative assessment of how much the foundry drag limits overall semiconductor earnings growth. The available data show strong memory performance and weak foundry performance occurring simultaneously, with net 2024 semiconductor operating profit substantially recovered from 2023 lows but declining sequentially in Q3 and Q4 2024 as Samsung increased R&D expenditures.
SK Hynix's higher operating profit margin (according to e4ds news) despite lower sales demonstrates that memory mix — specifically HBM dominance — can more than offset scale disadvantages, underscoring the strategic significance of Samsung's reported HBM market share gap.
Open: Samsung does not publicly disclose foundry-specific utilization rates or financial performance separately from its broader Device Solutions division, limiting independent verification of sub-50% foundry utilization reported by Semiecosystem; Whether Samsung's increased R&D expenditures in Q3 and Q4 2024 will translate into competitive gains in foundry or HBM markets remains to be seen