Google is now among Samsung’s top five clients thanks to the growth of AI technologies.

Artificial intelligence — the new driver of change in supply chains

The technological “boom” of AI has reshuffled the roles and influence of major players in the semiconductor market. As a result, Nvidia was able to turn Apple into TSMC’s largest customer, and Samsung Electronics also saw shifts among its most significant clients.

Who is now among Samsung’s top five buyers?

In 2023, Google entered the top five leading consumers of chips from the South Korean giant for the first time. This meant that the corporation displaced Verizon, a telecom operator that had long held a spot among the leaders.

The other five major customers added:

Orders from all five companies accounted for less than 15 % of Samsung’s annual revenue, which reached $228 billion in 2023. This indicates a broader base of income sources compared to companies like Nvidia or AMD, making the Korean manufacturer’s risks more balanced.

How does Google use Samsung chips?

Google actively purchases DDR5 and HBM memory chips from Samsung for its data centers. The internal TPU accelerators developed by the company are equipped with HBM memory, so a significant portion of that memory comes specifically from Samsung. Estimates suggest that by the end of last year, more than half of the HBM used by Google in its TPU accelerators came from the Samsung brand.

Apple — supplier and competitor

Apple remains a major customer of Samsung but is also a direct competitor in the smartphone segment. The company purchases LPDDR5X chips from Samsung for the iPhone 17 and future models. It is expected that even Apple’s first foldable phone will be equipped with memory from Samsung.

Memory purchases account for up to 9 % of the cost of an iPhone, and up to 15 % for iPads and Macs. Therefore, supplying components to meet Apple’s needs brings significant profit to Samsung.

Revenue geography: new trends

Last year, the company’s sales share in both Americas totaled 39.9 % of total revenue and grew by 12.1 % to $90.2 billion. In China, the percentage contribution fell from 14.6 % to 14.2 %, but absolute figures increased by 7.7 %. On Samsung’s domestic South Korean market, revenue rose by 17.1 % to $31.6 billion.

Thus, AI technologies not only change the technological landscape but also influence the structure of orders and the geographic distribution of income for the largest chip manufacturers.