Samsung is currently grappling with significant challenges across various divisions, including its memory chip segment. This has led to a shift in the competitive landscape, with SK Hynix, a direct competitor, overtaking Samsung’s 33-year dominance in the DRAM market during the first quarter of 2025. The downturn is projected to persist into the second quarter of 2025. Despite Samsung’s longstanding reputation in the tech industry for resilience, recent issues have eroded its leadership in memory chips.

The company has openly apologized to its shareholders for its underwhelming performance in critical areas. A notable concern has been its slower growth amid the rapidly evolving AI landscape. Samsung is a key supplier of high-bandwidth memory (HBM) chips, essential for AI-driven hardware development, particularly for companies like NVIDIA. In its latest acknowledgment of the situation, Samsung executives admitted to failing to adequately respond to changing market conditions.

Meanwhile, competitors such as SK Hynix have capitalized on Samsung’s struggles. Research from Counterpoint reveals that SK Hynix achieved the premier position as a global DRAM supplier in Q1 2025, marking a historical shift given Samsung’s previous stronghold. In terms of market share, SK Hynix captured 36%, followed closely by Samsung with 34%, while Micron took third place with 25%. The demand for HBM in the AI sector has been crucial for SK Hynix, as many AI chip manufacturers have increased their orders, largely leaving Samsung out of the supply chain for critical HBM3E chips.

Looking ahead, analysts suggest that Samsung may remain in second place as a DRAM supplier for the foreseeable future. In response, the company is hastening the approval process for its upcoming HBM4 chips, aiming for readiness by the first quarter of 2025 as part of its strategy to recover its market position.