US Local Sources Report
Samsung Electronics Says "Still Ongoing"
Industry: "Quality Test Passing Imminent"
Currently SK Hynix Exclusive Supplier
Interpreted as Attempt to Diversify Supply Chain
Foreign media reports that Samsung Electronics' 5th generation high-bandwidth memory (HBM) HBM3E 8-stack product has passed NVIDIA's qual test (quality verification) have clearly signaled that the HBM market landscape is entering a new phase. Samsung Electronics has practically denied the report, stating that the qual test is "still ongoing," but analysts suggest that the NVIDIA HBM supply system, which SK Hynix has monopolized, is likely to shift to a competitive structure. On the day of the report, the stock prices of Samsung Electronics and SK Hynix diverged in the early trading session.
On the 7th, Samsung Electronics officially stated that both the 8-stack and 12-stack HBM3E products are "undergoing testing" in response to the news about the HBM3E 8-stack product passing NVIDIA's qual test. However, since foreign media cited sources in the U.S. reporting that the product had passed, the industry interprets this as the qual test passing being imminent.
If Samsung Electronics' product passes, changes are inevitable in NVIDIA's HBM3E supply structure, which has been known to be monopolized by SK Hynix. SK Hynix, which has dominated the HBM market, supplied the 4th generation HBM3 to NVIDIA and began mass-producing and supplying the HBM3E 8-stack to NVIDIA in March.
On the other hand, Samsung Electronics has reorganized its system by appointing Vice Chairman Jeon Young-hyun as head of the Device Solutions (DS) division responsible for semiconductors and establishing a dedicated department, then started a fierce pursuit. With the possibility of Samsung's HBM products passing NVIDIA's qual tests one after another this year, expectations are growing that the market atmosphere will soon change.
Samsung Electronics' HBM products appear to be passing qual tests unusually quickly. This is because the news of the 4th generation HBM3 passing the qual test was reported on the 23rd of last month, and about two weeks later, news of the 5th generation HBM3E 8-stack passing emerged. Among Taiwanese semiconductor companies well-versed in NVIDIA's internal news, there are rumors that Samsung's HBM3E 12-stack product has also passed NVIDIA's qual test and may be announced as early as the end of this month or at the latest early next month.
Jensen Huang, CEO of NVIDIA, visited the Samsung Electronics booth at the annual developer conference 'GTC 2024' held in San Jose, USA, and left his autograph on the next-generation high-bandwidth memory (HBM), HBM3E. Photo by Jinman Han, Vice President of Samsung Electronics, SNS capture [Image source=Yonhap News]
There is also an interpretation that NVIDIA is accelerating the qual testing of Samsung Electronics' HBM products. Recently, rumors have circulated in the market that NVIDIA's artificial intelligence (AI) chips have defects, putting NVIDIA in a position where it must change its internal HBM supply system. According to Bloomberg and others, NVIDIA recently directly informed its customers of a design defect in its AI accelerator 'Blackwell.' It is also reported that a defect was found in the top-tier model 'GB200' of the Blackwell series, which NVIDIA has proudly promoted. The GB200 is a product equipped with 16 HBM3E stacks. NVIDIA, which planned to quickly launch next-generation products based on the GB200, has had to revise its strategy. Amid this, it is possible that NVIDIA sought to increase the supply scale of Samsung Electronics' HBM products to change the supply system, which had been concentrated on SK Hynix and Micron, and to tighten competition.
If Samsung Electronics' HBM products pass qual tests one after another and deliveries begin, it is expected to mark the beginning of full-scale HBM competition with SK Hynix. Experts predict that the fortunes of the two companies will diverge depending on which company's HBM NVIDIA uses in its high-performance product lineup. The competition for the 6th generation HBM4 products, expected to continue around the end of this year, is also likely to become more intense.
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