Samsung Holds Global Semiconductor Strategy Meeting... Tasked with Supplying 5th Generation HBM to Nvidia

Chairman Lee Jae-yong and Executives
Went on a 2-Week Business Trip to the US but Meetings Failed
Memory Market No.1 'Pride Issue'
Calls for DRAM Process Improvements

Samsung Electronics will embark on a global strategy meeting in the semiconductor sector on the 25th. There are forecasts that it will be difficult for Samsung Electronics, which aims to revitalize the atmosphere in its semiconductor business in the second half of this year, to devise a strategy due to its failure to completely finalize the 5th generation High Bandwidth Memory (HBM) supply deal with Nvidia. Samsung Electronics is currently undergoing a quality test (Qualtest) to supply Nvidia with the HBM3E 12-stack product.

Jensen Huang, CEO of NVIDIA, visited the Samsung Electronics booth at the annual developer conference 'GTC 2024' held in San Jose, USA, last March and left his autograph on the next-generation high-bandwidth memory (HBM), HBM3E.
[Photo by Yonhap News]

According to industry sources on the 21st, Samsung Electronics' top executives who went on a business trip to the United States for two weeks starting from the 31st of last month were unable to meet Jensen Huang, CEO of Nvidia, while there. Chairman Lee Jae-yong considered meeting CEO Huang, but it is reported that they could not coordinate the time and place due to scheduling conflicts. The same was true for Jeon Young-hyun, Vice Chairman and head of Samsung Electronics' Device Solutions (DS) division, who stayed in the U.S. for a week longer than Chairman Lee. An industry insider said, "It would have been virtually impossible for Vice Chairman Jeon to meet CEO Huang alone during this U.S. trip centered around Chairman Lee."

Initially, when Chairman Lee and others boarded the plane to the U.S., the possibility of a meeting with CEO Huang became a hot topic in the industry. A meeting with CEO Huang was expected to serve as an opportunity to reaffirm that Samsung Electronics is cooperating with Nvidia, which is leading the artificial intelligence (AI) chip market. In particular, Vice Chairman Jeon, who served as head of the DS division's memory business unit in March 2017, personally met CEO Huang and was the key figure in securing the supply of the 2nd generation HBM, HBM2, at that time. For this reason, there were many voices evaluating him as the 'key man' to also finalize the 4th generation HBM supply deal this time.

The DS division's global strategy meeting to be held at the Hwaseong plant on the 25th is also attracting attention both internally and externally, with the HBM supply deal standing out more than other agendas such as foundry (semiconductor contract manufacturing). Samsung Electronics' HBM3E 12-stack product is undergoing the formal Qualtest procedure, but it remains an uncertain factor until the supply is confirmed.

It is reported that Samsung Electronics internally regards this as a 'matter of pride.' It reflects a sense of crisis arising from the widening technological gap compared to competitors, despite Samsung Electronics once holding an unshakable number one position in the global memory market. In particular, there are strong voices calling for improvements in the DRAM process, which has been a pillar of Samsung Electronics' semiconductor competitiveness. The perception that HBM, which is made by stacking multiple DRAM chips and drilling tiny holes, is ultimately a DRAM battle underlies this. It is also reported that Vice Chairman Jeon expressed the opinion that the DRAM process needs to be revised again at his first meeting after taking office last month.