According to a report from Tom’s Hardware citing industry sources, it’s indicated that Chinese memory giant ChangXin Memory Technologies (CXMT) has started mass production of HBM2. If confirmed, this is approximately two years ahead of the expected timeline, although the yield rate for HBM2 is still uncertain.

Earlier, Nikkei once reported that CXMT had begun procuring equipment necessary for HBM production, estimating it would take one to two years to achieve mass production. Currently, CXMT has ordered equipment from suppliers in the U.S. and Japan, with American companies Applied Materials and Lam Research having received export licenses.

Reportedly, HBM2 has a per-pin data transfer rate of approximately 2 GT/s to 3.2 GT/s. Producing HBM2 does not require the latest lithography techniques but does demand enough manufacturing capacity.

The process involves using through-silicon vias (TSV) to vertically connect memory components, which is rather complex. However, packaging the HBM KGSD (known good stack die) modules is still less intricate than manufacturing traditional DRAM devices using a 10nm process.

CXMT’s DRAM technology is said to be lagging behind that of Micron, Samsung, and SK hynix. These three companies have already started mass production of HBM3 and HBM3e and are preparing to advance to HBM4 in the coming years.

There also are reports indicating that Huawei, the Chinese tech giant subject to US sanctions, looks to collaborate with other local companies to produce HBM2 by 2026. Per a previous report from The Information, a group led by Huawei aimed at producing HBM includes Fujian Jinhua Integrated Circuit.

Moreover, since Huawei’s Ascend 910 series processors use HBM2, it has made HBM2 a crucial technology for advanced AI and HPC processors in China. Therefore, local manufacturing of HBM2 is a significant milestone for the country.

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(Photo credit: CXMT)

According to a report from Bloomberg, Jun Young-hyun, head of Samsung’s chip business, recently sent a stern warning to employees about the need to reform the company’s culture to avoid falling into a vicious cycle.

Jun stated that the recent improvement in Samsung’s performance was due to a rebound in the memory market. To sustain this progress, Samsung must take measures to eliminate communication barriers between departments and stop concealing or avoiding problems.

Earlier this week, Samsung announced its Q2 earnings, showcasing the fastest net profit growth since 2010. However, Jun Young-hyun highlighted several issues which may undermine Samsung’s long-term competitiveness.

He emphasized the need to rebuild the semiconductor division’s culture of vigorous debate, warning that relying solely on market recovery without restoring fundamental competitiveness would lead to a vicious cycle and repeating past mistakes.

Samsung is still striving to close the gap with its competitors. The company is working to improve the maturity of its 2nm process to meet the high-performance, low-power demands of advanced processes. Samsung’s the first-generation 3nm GAA process has achieved yield maturity and is set for mass production in the second half of the year.

In memory, Samsung is beginning to narrow the gap with SK Hynix in high-bandwidth memory (HBM). According to Bloomberg, Samsung has received certification for HBM3 chips from NVIDIA and expects to gain certification for the next-generation HBM3e within two to four months.

Jun emphasized that although Samsung is in a challenging situation, he is confident that with accumulated experience and technology, the company can quickly regain its competitive edge.

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(Photo credit: Samsung)

Samsung Electronics, which has been surround by concerns that its HBM3e products are still struggling to pass NVIDIA’s qualifications, has confirmed in its second quarter earnings call that the company’s fifth-generation 8-layer HBM3e is currently undergoing customer valuation, and is scheduled to enter mass production in the third quarter, according to a report by Business Korea.

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.

Driven by the momentum, the report from Business Korea, citing an official speaking at the conference call on July 31^st, states that the share of HBM3e chips within Samsung’s HBMs is anticipated to surpass the mid-10 percent range in the third quarter. Moreover, it is projected to speedily grow to 60% by the fourth quarter.

According to Samsung, its HBM sales in the second quarter already grew by around 50% from the previous quarter. Being ambitious about its HBM3 and HBM3e sales, Samsung projects its HBM sales will increase three to five times in the second half of 2024, driven by a steep rise of about two times each quarter.

Samsung has already taken a big leap on HBM as its HBM3 chips are said to have been cleared by NVIDIA last week. According to a previous report by Reuters, Samsung’s HBM3 will initially be used exclusively in the AI giant’s H20, which is tailored for the Chinese market.

On the other hand, the South Korean memory giant notes that it has completed the preparations for volume production of its 12-layer HBM3e chips. The company plans to expand the supply in the second half of 2024 to meet the schedules requested by multiple customers, according to Business Korea. The progress of its sixth-generation HBM4 is also on track, scheduled to begin shipping in the second half of 2025, Business Korea notes.

Samsung Electronics reported higher-than-expected financial results in the second quarter, with a six-fold year-on-year increase in net income, soaring from KRW 1.55 trillion won (USD 1.12 billion) to KRW 9.64 trillion (USD 6.96 billion), as demand for its advanced memory chips that are crucial for AI training remained strong.

SK hynix, as the current HBM market leader, has expressed its optimism in securing the throne as well. The company reportedly expects its HBM3e shipments to surpass those of HBM3 in the third quarter, with HBM3e accounting for more than half of the total HBM shipments in 2024. In addition, it expects to begin supplying 12-layer HBM3e products to customers in the fourth quarter.

Micron, on the other hand, has reportedly started mass production of 8-layer HBM3e as early as in February. The company reportedly plans to complete preparations for mass production of 12-layer HBM3e in the second half and supply it to major customers like NVIDIA in 2025.

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(Photo credit: Samsung)

According to TrendForce’s latest memory spot price trend report, neither did the DRAM nor NAND spot prices sees much momentum last week. Spot prices of DDR4 and DDR5 products didn’t show significant fluctuations as the market has not seen a demand uptick. As for NAND flash, the wave of stocking demand during July in response with the peak season in the third quarter of each year didn’t appear. Details are as follows:

DRAM Spot Price:

In the spot market, the overall trading volume has fallen further because the demand for consumer electronics has yet to rebound, and Taiwan’s spot trading was suspended for two days (from July 24th to 25th) due to a typhoon. The spot market as a whole has not seen a demand uptick compared to the previous week, and buyers are mostly waiting for further developments. Consequently, spot prices of DDR4 and DDR5 products have not shown significant fluctuations. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) dropped by 0.35% from US$2 last week to US$1.993 this week.

NAND Flash Spot Price:

The spot market would usually generate a wave of stocking demand during July in response with the peak season in the third quarter of each year, but has been rather sluggish this year due to the sufficient extent of inventory among end clients, as well as enervated market demand. A small number of spot traders were attempting to lower their quotations tentatively last week in the hope of revitalizing buyers’ demand, which was proven to be quite ineffective. Generally speaking, recent spot market prices have been somewhat lethargic alongside a continuous shrinkage of transactions. Spot price of 512Gb TLC wafers remains unchanged this week at US$3.253.

Samsung Electronics announced its financial results for the second quarter today (July 31st), posting KRW 74.07 trillion in consolidated revenue and operating profit of KRW 10.44 trillion (approximately USD 7.5 billion). The memory giant’s strong performance can be contributed to favorable memory market conditions, which drove higher average sales price (ASP), while robust sales of OLED panels also contributed to the results, according to its press release.

In early July, the company estimated a 15-fold increase YoY in second-quarter operating profit, which was expected to jump 1,452 per cent to KRW 10.4 trillion in preliminary numbers for the April-June quarter, the highest since the third quarter of 2022. The actual results are in line with its earlier projection.

Samsung’s DS Division posted KRW 28.56 trillion in consolidated revenue and KRW 6.45 trillion in operating profit for the second quarter, posting a 23.4% and 2377% QoQ growth, respectively.

Strong Demand for HBM, DDR5 and Server SSDs to Extend in Second Half on AI Applications

Regarding current market conditions, Samsung notes that driven by the strong demand for HBM as well as conventional DRAM and server SSDs, the memory market as a whole continued its recovery. This increased demand is a result of the continued AI investments by cloud service providers and growing demand for AI from businesses for their on-premise servers.

However, Samsung observes that PC demand was relatively weak, while demand for mobile products remained solid on the back of increased orders from Chinese original equipment manufacturer (OEM) customers. Demand from server applications continued to be robust.

Samsung projects that in the second half of 2024, AI servers are expected to take up a larger portion of the market as major cloud service providers and enterprises expand their AI investments. As AI servers equipped with HBM also feature high content-per-box with regards to conventional DRAM and SSDs, demand is expected to remain strong across the board from HBM and DDR5 to server SSDs.

In response to the heating market demand, Samsung plans to actively expand capacity to increase the portion of HBM3e sales. High-density products will be another major focus, such as server modules based on the 1b-nm 32Gb DDR5 in server DRAM.

Samsung has already taken a big leap on HBM as its HBM3 chips are said to have been cleared by NVIDIA last week, which will initially be used exclusively in the AI giant’s H20, a less advanced GPU tailored for the Chinese market.

For NAND, the company plans to increase sales by strengthening the supply of triple-level cell (TLC) SSDs, which are still a majority portion of AI demand, and will address customer demand for quad-level cell (QLC) products, which are optimized for all applications, including server PC and mobile.

The ramping of HBM and server DRAM production and sales is likely to further constrain conventional bit supply in both DRAM and NAND, Samsung notes.

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