The AI wave continues to fuel surging demand for AI chips. Following reports of HBM sellouts and manufacturers ramping up production to meet demand, recent news reveals that Nvidia’s Blackwell architecture GPUs are also in short supply.

Nvidia’s Blackwell GPUs Sold Out for the Next 12 Months

Although Nvidia’s Blackwell architecture GPUs are delayed until Q4 of this year, it hasn’t dampened orders.

According to Tom’s Hardware, Morgan Stanley recently held a three-day meeting in New York with Nvidia CEO Jensen Huang, CFO Colette Kress, and other members of the chipmaker’s management team.

Morgan Stanley reported that Nvidia stated that orders for Blackwell architecture GPUs are sold out for the next 12 months, and new customers placing orders now won’t receive products until the end of 2025.

Existing customers, including AWS, CoreWeave, Google, Meta, Microsoft, and Oracle, have already purchased all of the Blackwell architecture GPUs that Nvidia and its partner TSMC can produce in the coming quarters.

The industry points out that the demand for high-performance GPUs and the AI chip market behind them remains frenetic, and the competition between major AI chip manufacturers such as Nvidia, AMD, and Intel will become increasingly fierce.

Three Memory Giants Seize HBM3e Opportunities, Highlighting the Importance of 12hi Products

Driven by the continuous iteration of high-performance AI chips and the expansion of HBM capacity per system, the demand for HBM bits continues to grow.

At the same time, with the iteration of mainstream GPU products from Nvidia and AMD, as well as changes in HBM specifications, the market will gradually upgrade from HBM3 to HBM3e. The three major memory manufacturers will actively seize HBM3e opportunities.

According to TrendForce, the annual growth rate of HBM demand bits will be close to 200% in 2024 and will double again in 2025.

TrendForce estimates that driven by the active adoption of new-generation HBM products by AI platforms, more than 80% of HBM demand bits will be for HBM3e generation products in 2025, of which 12-hi will account for more than half, becoming the mainstream product that major AI manufacturers will compete for in the second half of next year, followed by 8-hi.

Samsung, SK Hynix, and Micron have submitted their first batches of HBM3e 12-hi samples in the first half of 2024 and the third quarter, respectively, and are currently in the continuous verification stage. Among them, SK Hynix and Micron are progressing faster and are expected to complete verification by the end of this year.

(Photo credit:  Nvidia)

Though has yet to disclose the actual progress on its 12-Hi HBM3e verification with AI chip giant NVIDIA, Samsung is rumored to lower its target for the maximum production capacity (CAPA) of HBM by the end of 2025, which echoes the speculation on delays of HBM3e mass production for key customers, according to Korean media outlet ZDNet.

It is worth noting that the struggling memory giant reportedly plans to lower the capacity target by over 10%, from the initial monthly goal of 200,000 units to 170,000 units by the end of next year, ZDNet suggests, as it now takes a relatively cautious approach to facility investment plans.

According to the report, as of the second quarter, in order to narrow the gap with competitors such as SK hynix, Samsung had planned to increase HBM production capacity to 140,000–150,000 units per month by the end of this year, and up to 200,000 units per month by the end of next year.

At the Q2 earnings call in late July, Samsung disclosed an ambitious roadmap for its HBM products. According to a previous report from Business Korea, Samsung expects the share of HBM3e chips within its HBMs to surpass the mid-10 percent range in the third quarter, and speedily grow to 60% by the fourth quarter. The company also projects its HBM sales to increase three to five times in the second half of 2024.

However, the scenario has changed a few months later. Citing a source familiar with the situation, the report by ZDNet notes that Samsung has decided to slow down the pace of facility investments due to the underperformance of its HBM business. Further discussions on investments will only proceed once its HBM3e supply for NVIDIA is confirmed, the source indicates.

According to the analysis by TrendForce, achieving stable yields for HBM3 and HBM3e 8-Hi products required at least two quarters of learning in previous generations. Based on this precedent, the learning curve for HBM3e 12-Hi is unlikely to shorten significantly, especially with the rapid market shift toward the 12-Hi version.

Furthermore, key products such as NVIDIA’s B200 and GB200, as well as AMD’s MI325 and MI350, will adopt HBM3e 12-Hi. The high cost of these systems will also demand strict stability, complicating mass production and adding another layer of uncertainty.

Ahead of its Q3 earnings call, Samsung already warned its profit would fall short of market expectations, while issuing an apology for the disappointing performance. Samsung’s operating profit for the third quarter is expected to reach 9.1 trillion won, which is below the expected 10 trillion won.

Another report by The Korea Times notes that the market expected SK hynix to see a substantial increase in operating profit driven by strong HBM demand, potentially outpacing Samsung’s semiconductor division.

To boost its competitiveness in the semiconductor industry, Samsung intends to assign research and development staff directly to its manufacturing facilities. This initiative seeks to enhance communication and collaboration with on-site production teams, according to a report by SmBom.

Read more

• [News] Lagging behind SK hynix in HBM, Samsung Plans Significant Year-end Cuts to Chip Executives
• [News] Samsung Foundry Faces Yield Struggles and Client Losses, External Push for Spinoff and U.S. Listing

(Photo credit: Samsung)

After reporting disappointing third-quarter earnings forecast, Samsung’s next move has become the center of market attention. According to a report by Business Korea, to turn the situation around, Samsung may shift its strategy focus to early HBM4 mass production, as well as targeting advanced foundry solutions below 2nm.

A couple of days ago, Samsung warned its third-quarter profit would probably reach 9.1 trillion won, falling short of market expectations. Jeon Young-hyun, the head of Samsung’s Device Solutions (DS) division, issued an unusual public apology in the meantime.

Citing industry sources, Business Korea notes that Samsung’s DS division is expected to post an operating profit of around 5 trillion won (about USD 3.8 billion) for the third quarter, which is reportedly below the market expectation of 6 trillion won. The figure is significantly lower than SK hynix’s projected quarterly operating profit, which is expected to be in the high 6 trillion won range, according to the report.

Samsung May Accelerate HBM4 Progress to Turn the Tide

The series of setbacks have prompted the struggling giant to take action. As Samsung’s lackluster performance could be attributed to its delay in supplying NVIDIA with its 12-layer HBM3e product, industry insiders cited by Business Korea suggest that accelerating the mass production of HBM4, as well as introducing 2nm foundry solutions, could just be the remedies Samsung needs.

In terms of the HBM market, in which Samsung is lagging behind SK hynix on HBM3e verification, the report indicates that Samsung is expected to prioritize the early mass production of HBM4, which is projected to become mainstream in 2025.

A source familiar with the situation told Business Korea that HBM orders from companies other than NVIDIA would rise next year. Major tech firms, including AMD, Amazon, Microsoft, Google, and Qualcomm, are also working on AI semiconductors. Therefore, it does not necessarily mean that Samsung should concentrate solely on NVIDIA, and it could accelerate supply contracts with NVIDIA’s competitors, the report notes.

TrendForce’s latest findings indicate that Samsung, SK hynix, and Micron have all submitted their first HBM3e 12-Hi samples in the first half and third quarter of 2024, respectively, and are currently undergoing validation. SK hynix and Micron are making faster progress and are expected to complete validation by the end of this year.

2nm Advancements Would be Another Focus

On the other hand, in terms of the foundry sector, the report suggests that Samsung is expected to further enhance its ‘turnkey order’ strategy. This approach addresses concerns about technology leakage while providing HBM as part of a comprehensive package.

According to the report, Samsung is set to begin mass production of its GAA 2nm process in 2025. The company also aims to complete the development of the 2nm process with Backside Power Delivery Network (BSPDN) technology by 2027. Having secured 2nm orders from Japan’s AI unicorn Preferred Networks (PFN) and U.S. AI semiconductor company Ambarella, Samsung reportedly plans to seek collaboration with major tech firms.

To attract customers, Samsung will host the “Foundry Forum 2024” online on October 24. Previously scheduled to be held in Beijing, the event will now be conducted virtually, which aligns with the company’s efforts to reduce costs. Will it make further progress in advanced nodes? The whole world is watching.

Read more

• [News] Lagging behind SK hynix in HBM, Samsung Plans Significant Year-end Cuts to Chip Executives
• [News] Samsung Foundry Faces Yield Struggles and Client Losses, External Push for Spinoff and U.S. Listing

(Photo credit: Samsung)

After reporting disappointing third-quarter earnings forecast earlier this week, Samsung’s head of Device Solutions (DS) division, Jun Young-hyun, had issued an unusual apology. Now the struggling giant seems to be making its next move. According to the latest report by the Korea Economic Daily, the company is set to significantly reduce its chip executive positions and reorganize its semiconductor-related operations.

The report notes that Samsung is currently auditing the memory department within the DS division, which manages its semiconductor business. It is worth noting that the review is said to be led by Vice Chairman Jun Young-hyun himself, while the audit may result in substantial job cuts at the executive level.

According to insiders cited by the report, a major executive reshuffle is planned as part of the company’s year-end personnel changes.

For more details, the report indicates that in the year-end reshuffle, Samsung is expected to overhaul the leadership of its three core business units within the DS division, which encompasses memory, foundry, and System LSI. Moreover, key positions, such as the chief technology officer and heads of manufacturing and technology, are also subject to change, according to sources cited by the report.

According to the information cited by the report, as of the second quarter, Samsung’s DS division had 438 executives, making up 38% of the company’s total 1,164 executives. Notably, this number is more than double that of the current HBM leader, SK hynix, which has 199 executives.

According to sources cited by Business Korea, Samsung is also expected to simplify its foundry operations and restructure the Semiconductor Research Center, which is responsible for developing future chip technologies.

Although Samsung did not provide a detailed performance breakdown by division, analysts cited by the report estimate that its foundry business likely suffered losses of approximately 1.5 trillion won in the third quarter. On the other hand, its core memory business would likely to generate an operating profit of 5.5 trillion won, which marks the first time the company’s memory profit falls short of SK hynix’s, the report suggests.

Read more

• [News] Samsung Reportedly Set to Cut About 10% of Jobs in Southeast Asia, Australia, and New Zealand
• [News] Samsung Foundry Faces Yield Struggles and Client Losses, External Push for Spinoff and U.S. Listing

(Photo credit: Samsung)

According to TrendForce’s latest memory spot price trend report, regarding DRAM, trading volumes in the spot market continues to fall during China’s National Day Golden Week, while a rebound is unlikely before the year’s end. As for NAND flash, buyers’ reluctance towards procurement has further exacerbated the excessive provision within the market. Details are as follows:

DRAM Spot Price:

It is now China’s National Day Golden Week, so trading volumes in the spot market continues to fall. Furthermore, some module houses are keen to lower their inventory levels, thus pushing spot prices to go down further. The supply-demand dynamics of the spot market remains unchanged, and a rebound is unlikely before the year’s end. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has dropped by 0.26% from US$1.934 last week to US$1.929 this week.

NAND Flash Spot Price:

The spot market was seen with sluggishness in transactions as buyers had not raised their willingness in stocking amidst the National Day holiday of China. Several suppliers are obviously selling their products at lower unit prices this week as sales pressure continues to envelop the entire market, which however has yet to alleviate the overall status, where buyers’ reluctance towards procurement has only further exacerbated the excessive provision within the market. Spot prices of 512Gb TLC wafers have dropped by 0.58% this week, arriving at US$2.595.