Samsung Electronics and SK Hynix nearly doubled their sales in China during the first half of this year compared with the same period last year, reversing a three-year decline caused by U.S.-China tensions and a semiconductor industry downturn.
The surge is largely attributed to China’s stockpiling of memory semiconductors for artificial intelligence (AI) development ahead of potential U.S. sanctions, as well as a recovery in domestic smartphone demand. TrendForce reports that fears of additional export restrictions are driving increased purchases of overseas chips, particularly those used in AI. TrendForce analyst Tom Hsu noted that this activity in the second quarter was “critical in boosting Korean suppliers’ DRAM sales.”
Samsung’s revenue from China reached 32.3 trillion won in the first half of the year, nearly doubling the 17.8 trillion won recorded in the same period last year. Although this figure includes sales from smartphones and home appliances, more than 90% of Samsung’s revenue in China comes from semiconductors. China’s share of Samsung’s total sales jumped from 21.7% to 30.8%.
SK Hynix reported a significant increase in Chinese sales, with revenue hitting 8.6 trillion won, more than double the 3.8 trillion won recorded during the same period last year. The rise was driven by strong demand for low-power memory semiconductors from Chinese smartphone manufacturers and an increase in DRAM and NAND memory prices.
Amid concerns about intensified U.S. sanctions on advanced semiconductor exports, Chinese companies are reportedly stockpiling critical AI memory chips, including high-bandwidth memory (HBM), from Samsung and SK Hynix. The South China Morning Post reported that the surge in sales comes amid speculation that Washington may further restrict China’s access to advanced chips and technologies from the U.S. and its allies. Reuters, citing multiple sources, also reported that Chinese tech giants such as Huawei and Baidu, along with startups, are stockpiling HBM semiconductors from Samsung Electronics in anticipation of U.S. curbs on exports of the chips to China.
However, industry insiders suggest that the HBMs currently being shipped to China are older-generation products, such as HBM2E, and are available only in limited quantities.
Looking ahead, Samsung and SK Hynix are expected to see continued growth in Chinese sales in the second half of the year. The U.S. has not imposed significant restrictions on the export of memory semiconductors to China, allowing both companies to operate their Chinese production facilities without disruption. Samsung operates NAND plants in Xi’an and packaging facilities in Suzhou, while SK Hynix runs DRAM facilities in Wuxi, packaging plants in Chongqing, and NAND plants in Dalian. Both companies received U.S. government approval last October to import American semiconductor equipment to their Chinese factories without additional permits. However, reports indicate that these companies are storing outdated semiconductor equipment in warehouses rather than selling it to Chinese firms, likely to avoid potential backlash from the U.S.
As China’s domestic smartphone market recovers and the country accelerates its push for advanced semiconductors, demand for memory chips in China is expected to rise further. In the first quarter of this year, Supreme Electronics, a Chinese semiconductor distributor, was added to Samsung’s list of top five customers.
Nevertheless, the risk of further U.S. restrictions remains significant. Earlier this month, Bloomberg reported that the U.S. government might introduce new measures to prevent Samsung, SK Hynix, and Micron from supplying HBM chips to China. Since both Samsung and SK Hynix rely on American design software and equipment to develop and produce these chips, such restrictions could present a substantial challenge to their operations in China.
