Samsung Electronics has fully repaid the 20 trillion won (approximately $14.2 billion) it borrowed from Samsung Display during the 2023 semiconductor downturn in the first half of this year. The decision comes as cash-equivalent assets have surged amid a memory supercycle driven by the artificial intelligence (AI) industry.

According to South Korea’s Financial Supervisory Service electronic disclosure system on the 18th, Samsung Electronics fully repaid the unsecured borrowings of 20 trillion won from Samsung Display during the second quarter. The maturity date recorded in the semi-annual report was May 29, and the long-term borrowings that had been recorded at 20 trillion won as of the end of the previous quarter were entirely removed from this report.

Samsung Electronics had previously repaid 10 trillion won of the borrowings on April 23. Given this, the remaining 10 trillion won is believed to have been repaid in late May.

Samsung Electronics borrowed the 20 trillion won in long-term debt from Samsung Display in 2023. At the time, the borrowing period was from February 2023 to August 2025, with an annual interest rate of 4.60%. The year 2023 was a period of significant weakness for Samsung Electronics’ semiconductor business, with the Device Solutions (DS) division posting an annual loss of more than 14 trillion won (approximately $9.9 billion). To secure liquidity needed for large-scale semiconductor investments, the company departed from its long-standing “debt-free management” principle and received funding from Samsung Display.

Samsung Electronics later extended the loan period once, from the original August 2025 to February 2028, but repaid the entire amount in two installments during the second quarter of this year.

AI Memory Boom Transforms Cash Flow

Samsung Electronics’ early repayment of the borrowings is attributed to the memory supercycle effect. As global big tech companies’ AI infrastructure investments have driven surging demand for high-value DRAM and NAND, Samsung Electronics posted operating profit of 142.86 trillion won (approximately $101.2 billion) from the DS division in the first half alone. This represents 97.4% of Samsung Electronics’ total operating profit. DS division revenue reached 209.23 trillion won (approximately $148.2 billion).

In the semi-annual report, Samsung Electronics disclosed that memory average selling prices (ASP) in the first half rose approximately 220% compared to last year’s annual average.

Cash holdings have also increased substantially. On a consolidated basis, cash and cash equivalents rose from 57.86 trillion won (approximately $41.0 billion) at the end of last year to 92.92 trillion won (approximately $65.8 billion) at the end of June this year. Short-term financial instruments increased from 67.97 trillion won (approximately $48.1 billion) to 97.04 trillion won (approximately $68.7 billion) over the same period. The combined total of the two items increased by approximately 64.13 trillion won (approximately $45.4 billion) in just six months, from 125.82 trillion won (approximately $89.1 billion) at the end of last year to 189.95 trillion won (approximately $134.6 billion) at the end of the first half.

Long-term borrowings at Samsung Electronics’ headquarters level have also decreased significantly. On a standalone basis, long-term borrowings fell from 23.4 trillion won (approximately $16.6 billion) at the end of last year to 4.25 trillion won (approximately $3.0 billion) at the end of June this year, reflecting the elimination of the 20 trillion won Samsung Display borrowings. As of the end of June, remaining long-term borrowings consist of 3.6 trillion won (approximately $2.6 billion) from Korea Development Bank (KDB) and 654.2 billion won (approximately $463.5 million) in lease liabilities.

Samsung Electronics’ early repayment of borrowings demonstrates that the semiconductor industry recovery is translating beyond mere earnings improvement into financial structure normalization. Analysts note that by clearing the affiliate borrowings that were unavoidably introduced during the 2023 downturn within roughly two years of the AI memory boom taking hold, Samsung Electronics has laid the groundwork to return to its debt-free management principle.