Samsung Electronics has outperformed Taiwanese semiconductor giant TSMC in semiconductor sales for the first time in two years. The surge is attributed to Samsung’s 8- and 12-layer 5th generation high bandwidth memory (HBM) ‘HBM3E’ products, which have caught the global industry’s attention and are poised for supply to major artificial intelligence (AI) semiconductor companies, including Nvidia and AMD.

On Wednesday, Samsung Electronics reported consolidated sales of 74.7 trillion won and an operating profit of 10.44 trillion won for the second quarter. This marks a 23% increase in sales year-on-year, with operating profit soaring nearly 16 times.

Samsung’s Device Solution (DS) Division played a crucial role in this earnings surprise, fueled by the booming AI sector. The division’s sales surged 94% year-on-year to 28.56 trillion won in the second quarter, surpassing TSMC’s reported second-quarter sales of $673.51 billion. This marks a reversal from the second quarter of 2022 when Samsung’s semiconductor sales trailed behind TSMC. The DS Division’s operating profit also saw a significant YoY increase by over 10 trillion won to reach 6.45 trillion won.

Samsung Electronics also provided a roadmap for its HBM business during a conference call. Kim Jae-joon, vice president of the Memory Business Division, announced that the company plans to start supplying 8-layer HBM3E products in the third quarter and 12-layer products in the second half of the year, with NVIDIA’s supply expected in the latter part of the year. He further noted that the volume of customer supply negotiations completed this year is nearly four times that of last year, with plans to more than double the supply next year.

Do-Young Kwak now@donga.com