Samsung Electronics refuted a Friday news report that it failed to pass a test of Nvidia’s high-bandwidth memory (HBM) chips. It said its “tests with various global partners to supply HBM are on track.”

Samsung is currently testing its HBM chips with U.S. graphic chip giant Nvidia to supply the memory chips for Nvidia’s AI processors, but Reuters reported that Samsung did not pass the test due to issues with heat and power consumption.

“Samsung Electronics’ latest high bandwidth memory (HBM) chips have yet to pass Nvidia’s tests for use in the U.S. firm’s AI processors due to heat and power consumption problems, three people briefed on the issues said,” Reuters reported.

Nvidia is the leading company in the global AI chip market. While SK hynix lags behind Samsung in overall memory semiconductor market share, it holds the largest share in the rapidly growing AI memory chip market by exclusively supplying its HBM chips to Nvidia. To expand its presence in the fast-growing HBM market, Samsung is following in SK hynix’s footsteps.

Regarding the report, Samsung answered it is “smoothly” conducting tests with multiple customers for their HBM chips.

“Samsung Electronics is smoothly conducting tests for HBM supply with various global partners. We are closely collaborating with many companies and continuously testing technology and performance,” the company said in a statement.

The company added that it is working on verifying the quality and performance of HBM chips. “Samsung Electronics is continuously improving quality and enhancing reliability for all products, and we aim to provide the best solutions to our customers,” it said.

Amid the concerns for Samsung, its stock price ended at 75,900 won on Friday, down 3.07 percent from the previous day.

Experts said that Samsung may have encountered these issues in an effort to deliver products quickly and that these types of issues are not uncommon in the semiconductor industry.

“According to the media report, Samsung’s products might have issues with power consumption and heat, which are common problems when the optimization process in semiconductor manufacturing is not properly carried out,” said Lee Jong-hwan, a professor of semiconductor engineering at Sangmyung University.

The professor, however, believes that Nvidia needs Samsung’s participation to diversify its suppliers and expects both sides to continue testing the products.

“AI memory chips are essential for Nvidia’s AI processors. Nvidia needs Samsung’s participation to maintain the price competitiveness of its AI processors, so they will continue the testing process with Samsung,” the professor said.

SK Group Chairman Chey Tae-won, left, poses with Nvidia CEO Jensen Huang in Silicon Valley, California, April 24. Captured from Chey’s Instagram
SK Group Chairman Chey Tae-won, left, poses with Nvidia CEO Jensen Huang in Silicon Valley, California, April 24. Captured from Chey’s Instagram

Jim Handy, a U.S.-based analyst from chip market research company Objective Analysis, said that while SK hynix currently leads the HBM market, Samsung could also stand out.

“When the 2022 price collapse occurred, all DRAM prices fell except for HBM. Suddenly, HBM was the only profitable part of the DRAM market. Samsung and Micron changed their minds about it and decided to compete with SK hynix,” the analyst told The Korea Times.

“Part of Samsung’s corporate culture is to be No. 1 in any market they enter. In memory chips, this has been DRAM, SRAM, Mask ROM, NOR flash and NAND flash, in that order. Now they want to become No. 1 in HBM. I fully expect them to do that.”

In the fierce HBM race, Samsung’s rival SK hynix is seeking to strengthen its grip on the market as it is exploring whether it can manufacture HBM in other countries, such as the United States and Japan, according to SK Group Chairman Chey Tae-won.

The chairman expressed his intention to further strengthen cooperation with companies from Japan and around the world in an interview with Japan’s Nihon Keizai Shimbun newspaper on Thursday.

“In the advanced manufacturing fields, including AI semiconductors, collaboration with the Japanese supply chain is indispensable. We will further strengthen collaboration and investment with Japanese manufacturers of devices and materials in the semiconductor field,” Chey told the Japanese newspaper. “We are continuously investigating whether (HBM) can be manufactured in Japan and the U.S.”


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