Samsung may not have a strong smartphone presence in China, but the country remains one of its largest global markets. A large chunk of its semiconductor business comes from the Asian country. In fact, in 2023, Samsung exported more chips to China than the United States. Unfortunately, it may never be able to replicate that success again.
China’s Economic Stimulus policy contributed to Samsung’s chip sales growth in 2023
According to Samsung’s latest business report (via The Korea Post), the company’s semiconductor exports to China reached KRW 64.93 trillion in 2023, a 53.9% year-over-year increase from KRW 42.20 trillion in 2022. This figure exceeded Samsung’s semiconductor exports to the United States, which reached KRW 61.35 trillion in the same period. This shows higher semiconductor demand in China than in the United States in 2023.
Samsung’s semiconductor business in China saw impressive gains across several subsidiaries. For instance, Xi’an Semiconductor Plant (SCS) revenue hit KRW 11.18 trillion, with an operating profit of KRW 1.19 trillion. Shanghai Semiconductor Sales Subsidiary (SSS) almost doubled — increased from KRW 15.65 trillion in 2022 to KRW 30.07 trillion in 2023.
Analysts say Samsung saw higher demand due to China’s aggressive economic stimulus that contributed CNY 150 billion (approximately KRW 30 trillion) to the market to increase demand for smartphones and home appliances, enabling the replacement of old electronic devices with new ones. This pushed higher semiconductor demand, resulting in a surge of orders for major chip suppliers.
Samsung mainly supplies China with LPDDR (Low Power DRAM), NAND Flash, image sensors, and display driver ICs (DDI). Some high-bandwidth memory (HBM) products are also part of its export portfolio. Now, Samsung is maintaining its dual-track strategy — selling more AI and high-performance memory chips in the US while still supplying mobile and electronics chips to China.
Despite the strong growth in overall semiconductor exports to China in 2023, Samsung has recently faced setbacks in securing AI chip orders due to U.S. trade restrictions on China under Donald Trump’s second term. Previous reports suggest that Samsung has abandoned its pursuit of securing Baidu’s 2nm AI chip orders, which could limit its AI chip exports to China.
