[Click e-Stock] "Samsung Electronics to Benefit Most from Google AI Ecosystem Expansion"

On November 26, KB Securities selected Samsung Electronics as its top pick in the semiconductor sector. The company maintained its target price of 160,000 KRW and a "Buy" investment rating.

Kim Dongwon, a researcher at KB Securities, explained, "Samsung Electronics is expected to directly benefit from the diversification of memory supply chains by North American big tech companies such as Google, Broadcom, Amazon, and Meta, as well as the expansion of the AI ecosystem, based on its high memory supply share to these firms."

Kim added, "Google has succeeded in vertically integrating its AI hardware and software through its self-developed AI inference chip, the TPU. Google, which previously used the TPU only for its own cloud servers, is now actively pursuing plans to sell the TPU to external companies. As the Gemini ecosystem centered on the TPU is expected to be established in earnest, reliance on the Nvidia GPU supply chain is likely to gradually decrease."

He further stated, "Concerns about an AI bubble, triggered by excessive capital expenditures and depreciation among big tech companies due to a focus on Nvidia GPU purchases, are expected to ease as the AI ecosystem diversifies going forward."

Kim estimated that Samsung Electronics' operating profit next year will reach 97 trillion KRW, up 108% from the previous year. In particular, he forecasted fourth-quarter operating profit to be 19 trillion KRW, representing a 192% increase year-on-year and a 56% increase quarter-on-quarter.

Kim also noted, "In the future, data centers are expected to move away from the GPU and HBM combination, and there will be a significant increase in the use of general DRAM such as 96GB and 128GB high-capacity server DDR5, LPDDR5X, and GDDR7, in addition to HBM utilizing TPU and CPU. In the case of Broadcom, which is responsible for designing and producing Google's TPU, Samsung Electronics holds the largest share in memory supply, so it is expected to be the biggest beneficiary as the Google TPU ecosystem expands."

He further explained, "The likelihood of Samsung HBM4, which is recognized for its speed advantage, passing quality certification early within the year is increasing significantly. With the world's largest DRAM production capacity, Samsung Electronics is expected to greatly increase memory supply to big tech companies going forward."

This content was produced with the assistance of AI translation services.