Samsung Electronics Passes HBM4 Quality Test, Poised to Supply NVIDIA: Regaining Memory Dominance?
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The most striking news I read this morning was undoubtedly about Samsung Electronics and its HBM4 developments. Reports have emerged that Samsung has passed the internal quality test for its next-generation high-bandwidth memory, HBM4, and is on the verge of supplying to NVIDIA. Personally, I’ve been curious about how Samsung, which was completely outpaced by SK Hynix in the HBM3 market, is planning its counterattack, and it seems concrete results are finally emerging.
In fact, Samsung’s struggles in the HBM market have been ongoing for quite some time. As of 2024, SK Hynix holds over 80% of the HBM market share, while Samsung lags behind at around 10%. Particularly, most of the HBM3 used in NVIDIA’s H100 and H200 GPUs were SK Hynix products. There were reports that NVIDIA had raised quality issues with Samsung’s HBM3 products, and indeed, Samsung was excluded from NVIDIA’s list of HBM suppliers for a while.
However, the situation seems poised to change with HBM4. According to the article, Samsung has passed the internal quality test for HBM4, achieving favorable results in both speed and power efficiency. More importantly, NVIDIA’s quality test results are expected soon. If Samsung passes NVIDIA’s test as well, it could secure a meaningful market share in the HBM sector once again.
The technical specifications of HBM4 highlight its significance. HBM4 is expected to improve bandwidth by more than 1.5 times compared to HBM3 and significantly enhance power efficiency. Specifically, it is anticipated to offer over 2TB of bandwidth per second, which is much faster than the current HBM3’s 819GB/s. As AI models grow larger and more complex, the demand for memory bandwidth is rapidly increasing.
A Signal of Change in the Memory Industry Landscape
Interestingly, there are reports that Micron has also begun redesigning HBM4. Analysts suggest that NVIDIA CEO Jensen Huang’s recent praise of Samsung and SK Hynix indicates NVIDIA’s active pursuit of diversifying its HBM suppliers. It appears to be a strategic move to reduce its heavy reliance on SK Hynix.
In fact, the HBM market is projected to be worth about $20 billion in 2025 and exceed $50 billion by 2030. It’s a high-growth market with an annual growth rate of over 20%. In this context, if Samsung can regain market share with HBM4, it could significantly boost the profitability of its entire memory business. Especially since HBM is priced 5-10 times higher than regular DRAM, the margin improvement could be substantial.
Samsung’s significant reshuffling in its semiconductor division is also noteworthy. Hwang Sang-jun, head of DRAM development, has been appointed as the head of the foundry business, which seems to indicate an intention to integrate memory technology into the foundry business. In fact, Samsung Foundry has recently received interest from Tesla regarding its 4nm process and is reportedly supplying next-generation 2nm AP samples to Qualcomm.
However, an interesting point is the forecast that there will be no HBM4 equipment orders this year. This could mean that existing HBM3 equipment can be used to produce HBM4, or it might indicate that mass production plans have not yet been finalized. Equipment companies like Hanmi Semiconductor might face challenging times for the foreseeable future.
SK Hynix’s Response and the Memory Boom
SK Hynix is unlikely to remain idle. Recent news indicates that they are conducting open recruitment while offering performance bonuses of 100 million KRW per employee, showcasing the intense competition for talent. With the memory industry experiencing a super boom, there are projections that both Samsung and SK Hynix will enter an era of 10 trillion KRW in operating profits.
Personally, I believe this situation is positive for the Korean semiconductor industry. As Samsung and SK Hynix compete, the pace of technological advancement will accelerate, ultimately strengthening global competitiveness. Especially with Chinese companies like YMTC and CXMT closing in, this is an opportunity for Korean companies to widen the technological gap.
The SSD shortage news is also intriguing. The fact that orders are backlogged for a year indicates the explosive increase in memory demand. As AI data center construction becomes more widespread, demand for storage as well as memory is surging. It’s an all-around favorable situation for memory companies like Samsung and SK Hynix.
However, one concern is the volatility of the memory market. In the past, memory booms often lasted a few years before suddenly plummeting. With concerns about an AI bubble being raised, there’s a possibility that memory demand could slow down faster than expected. Therefore, both Samsung and SK Hynix should invest more in developing next-generation technologies during this boom period.
In conclusion, Samsung Electronics’ passing of the HBM4 quality test could bring significant changes to the memory market landscape. It’s an opportunity to recover from the failures of HBM3 and reclaim memory dominance. While we need to see the results of NVIDIA’s quality test and the actual production and supply schedule, it seems like a hopeful sign that Samsung will not be completely ousted from the HBM market.
This article was written after reading the [Exclusive] Samsung Electronics Passes HBM4 Internal Quality Test… NVIDIA Supply Imminent article, with added personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content reflects the author’s personal views. Responsibility for investment decisions lies with the investor, and no liability is accepted for investment losses based on this article.
