November 25, 2024

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Samsung Electronics HBM3E (Samsung Electronics)

Samsung Electronics on Wednesday denied a Reuters report that its fifth-generation HBM3E chip has passed Nvidia's qualification test for use, saying it is "still running tests with major clients."

The news outlet reported earlier in the day that Samsung has cleared Nvidia’s qualification test for its HBM3E, the fifth-generation high bandwidth memory chip, creating a buzz that the world's No. 1 memory chipmaker may be starting supplying the chip to the US chip giant soon.

The report said that Samsung and Nvidia are expected to sign a supply deal soon, adding the delivery of the first batch could start by the fourth quarter of this year.

A Samsung official, however, said that the news is baseless and that the products are still being reviewed by clients without revealing the client names.

The chip giant has been striving to pass the qualification test of Nvidia, the dominant GPU maker and the main consumer of HBMs, since last year. In the meantime, its crosstown rival SK hynix has supplied the most advanced 8-layer HBM3E to Nvidia since February.

While it is solely up to Nvidia to decide whether to use Samsung's HBM3E chips, some industry observers predict the GPU maker is likely to clear the test for Samsung soon, citing the soaring demands for its advanced GPUs that power high-performance computing for artificial intelligence features.

Amid speculations growing over its seemingly delayed supply to Nvidia, Samsung has said that it is on track to start supplying the 8-layer HBM3E chip in the third quarter this year, with plans to supply a more advanced 12-layer product by the end of this year.

"For the 8-layer HBM3E, we prepared for a ramp-up of volume for mass production in the last quarter, and delivered samples to major clients," Samsung Electronics Executive Vice President Kim Jae-joon said during the earnings call on July 31.

Kim also said he expects HBM3E chips to take 60 percent of its total HBM sales.

There are also prospects that Nvidia could delay its decision to receive supply from Samsung, as it reportedly is experiencing design flaws on its future Blackwell GPUs, which could possibly push back the release date by three months.

Even if it is not for Nvidia, Samsung will still be supplying its lower-generation HBM products to other big tech firms, sources said.

"Carrying out a qualification test is all up to the customer, meaning it is not a required process for selling HBMs. Some may want to run qualification tests, others may just buy the product as we make it," an industry official said on condition of anonymity.

"Besides, HBM only takes a very small portion of Samsung's entire chip sales. The company is in no hurry to earn profits from the chip sale."

In the wake of the AI boom, HBM has come under the spotlight as the core component to support advanced graphic processing units in processing AI applications. Only three companies, Samsung, SK hynix and Micron Technology, produce the cutting-edge, high-value-added chip that is known to make double the operating profit margin of other conventional DRAMs.

SK hynix is currently dominating the burgeoning market and is expected to take over 52.5 percent of the market share this year, according to market tracker TrendForce. Samsung is expected to take 42.4 percent while Micron is predicted to take the remaining 5.1 percent.

In the second half of this year, HBM3E is forecast to be the mainstream product as companies will start delivery of the product, TrendForce said.

For the six-generation HBM4, Samsung aims to begin production within the first half of next year. SK hynix said it plans to start supplying 12-layer HBM4 in the latter half of 2025.

By Jo He-rim (herim@heraldcorp.com)