Some investors may be fretting over an artificial intelligence-related asset bubble. But sales of AI chips are still going strong, with the market expected to reach nearly $100bn this year, double that of 2023. Not all chipmakers are cashing in, though. Samsung Electronics is a notable example.
Average prices for these chips fell around a quarter last year. Samsung’s challenges run much deeper than just chips. Historically, sales of devices including smartphones, TVs and home appliances had provided a reliable buffer against the cyclical downturns of the chip industry. But this once dependable segment is now also facing headwinds from declining consumer demand and intensifying competition. Investors should not dismiss Samsung entirely when looking for AI exposure.