[News] Samsung Likely Emerges as the Pacemaker for the AI Market if It Secures HBM3e Supply to NVIDIA

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Samsung Electronics, which has been struggling at the final stage of its HBM3e qualification with NVIDIA, may unexpectedly emerge as the pacemaker for the AI ecosystem, as the company may somehow ease the cost pressure for building AI servers by balancing the market, as well as alleviating the tight HBM supply, according to a recent report by Korean media outlet Invest Chosun.

Samsung, in its second quarter earnings call, has confirmed that the company’s fifth-generation 8-layer HBM3e is undergoing customer valuation. The product is reportedly to enter mass production as soon as the third quarter.

Invest Chosun analyzes that while there is growing anticipation that NVIDIA could come up with a conclusion regarding Samsung’s HBM3e verification, the market’s attitude towards AI has also been gradually shifting in the meantime, as the main concern now is that semiconductors are becoming too expensive.

The report, citing remarks from a consultant, notes that the price of an NVIDIA chip may cost tens of thousands of dollars each, leading to concerns that the industry’s overall investment capex cycle might not last more than three years.

In addition, the report highlights that the cost of building an AI server for learning is about 40 times that of a standard server, with over 80% attributed to NVIDIA’s AI accelerators. Due to the cost pressure, big techs have been closely examining the cost structure for building AI servers.

Therefore, NVIDIA has to take its customers’ budgets into consideration when planning its roadmap. The move has also sparked speculation that NVIDIA, which is prompted to lower product prices, might compromise to bring Samsung onboard as an HBM3e supplier, the report states.

Citing an industry insider, the report highlights the dilemma of NVIDIA and its HBM suppliers. As the AI giant tries to shorten its product cycle, releasing the Blackwell (B100) series just two years after the Hopper (H100), HBM suppliers have been struggling except for SK hynix, as the company is the only one with the most experience.

If Samsung doesn’t join the HBM lineup, the overall supply of NVIDIA’s AI accelerators could be limited, driving prices even higher, the report suggests.

Under this backdrop, Samsung may have taken on the role of pacemaker in the AI semiconductor market, as it may help balance the market during a time when there are concerns about overheating in the AI industry. Also, if it is able to form a strong collaboration with NVIDIA by supplying 8-layer HBM3e, its technological gap with competitors will noticeably narrow.

TrendForce notes that Samsung’s recent progress on HBM3e qualification seems to be solid, and we can soon expect both 8hi and 12hi to be qualified in the near future. The company is eager to gain higher HBM market share from SK hynix so its 1alpha capacity has reserved for HBM3e. TrendForce believes that Samsung is going to be a very important supplier on HBM category.

Read more

• [News] Samsung’s 8-layer HBM3e to Start Mass Production in Q3, Driving HBM Sales to Soar 3-5 Times in 2H24
• [News] Battle between Memory Giants Heats up in 2H24 as Samsung and SK hynix Advance in HBM3/ HBM3e

(Photo credit: Samsung)