Samsung Enters NVIDIA's HBM3 Supply Chain?

Recent reports from foreign media suggest that Samsung Electronics has entered NVIDIA's supply chain for accelerator cards and is expected to begin supplying HBM3 memory to NVIDIA as early as October.

Prior to this, Samsung had already confirmed its supply of HBM3 to AMD, and it is projected that Samsung's market share in the HBM sector will potentially exceed 50% next year.

Lee Se-chul, Executive Director of Citi Global Markets Securities, stated, "Samsung will start supplying HBM3 to NVIDIA from the fourth quarter of this year, becoming a major supplier." Furthermore, Citi has raised Samsung's target price from 110,000 KRW to 120,000 KRW, stating that Samsung will become a key supplier of HBM3 memory chips to major customers, including NVIDIA.

 

Samsung's stock price rose by 6% following this positive news, marking the highest single-day increase since January 2021.

However, Samsung has stated that it cannot confirm the specific information regarding the supply of HBM3 to customers such as NVIDIA.

Previously, SK Hynix had been the exclusive supplier for NVIDIA. This means that once Samsung completes the technical verification of supplying HBM3 chips to NVIDIA, it may be responsible for processing individual GPU chips and HBM3 into orders for advanced packaging of the H100. Furthermore, there have been previous reports of cooperation between Samsung and NVIDIA regarding HBM3 technology verification and advanced packaging services.

It is reported that Samsung is also willing to design middle wafers for NVIDIA. In terms of engineers, Samsung can receive AI GPU wafers purchased from TSMC by NVIDIA and then purchase HBM3 from Samsung's Memory Business Division. Finally, Samsung's I-Cube 2.5D packaging technology will be used to complete the product.

 

Samsung is the only company that can provide advanced packaging solutions and HBM products simultaneously. Originally, AMD had considered using TSMC's CoWoS advanced packaging services, but due to capacity shortages and a majority of the capacity being taken by NVIDIA, it was unable to meet AMD's requirements. As a result, AMD had to change its plans and choose Samsung for advanced packaging services.

Samsung's HBM3 and HBM3P are expected to contribute to the profit growth of its chip division starting from next year. According to data from research firm Jibun Consulting, in the HBM product market in 2022, SK Hynix holds a 50% market share, Samsung holds 40%, and Micron holds 10%. However, HBM accounts for only 1% of the entire DRAM market. The firm predicts that HBM will maintain a high growth rate of 45% annually from this year until 2025.

Analysts also believe that if Samsung enters NVIDIA's chip supply chain, it could potentially supply 30% of NVIDIA's HBM3 by 2024.