Samsung’s reminiscence chip enterprise: Bother in paradise?

The week of 20 Could 2024 has been fairly eventful for Samsung’s semiconductor unit, the world’s largest producer of reminiscence chips like DRAMs, SRAMs, NAND flash, and NOR flash. Early this week, an sudden change of guard at Samsung’s semiconductor enterprise rocked the trade.

When Samsung abruptly changed its semiconductor enterprise chief Kyung Kye-hyun with DRAM and flash reminiscence veteran Jun Younger-hyun, the transition was principally credited to the “chip disaster” related to Samsung being a laggard in excessive bandwidth reminiscence (HBM) enterprise, the place SK hynix has grow to be a market chief.

Determine 1 Jun Younger-hyun led Samsung’s reminiscence chip enterprise from 2014 to 2017 after engaged on the event of DRAM and flash reminiscence chips. Supply: The Chosun Day by day

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It’s value noting that administration reshuffles at Samsung are normally introduced at the beginning of the 12 months. Nonetheless, being seen as a laggard in HBM know-how has pushed the reminiscence kingpin right into a determined place, and the appointment of a brand new chip unit head principally displays that sense of disaster on the world’s largest reminiscence chip provider.

HBM, a custom-made reminiscence product, has loved explosive progress in synthetic intelligence (AI) purposes resulting from its suitability for coaching AI fashions like ChatGPT. HBM, the place DRAM chips are vertically stacked to save lots of area and cut back energy consumption, helps course of large quantities of information produced by complicated AI purposes.

SK hynix, Samsung’s Korean reminiscence chip rival, produced its first HBM chip in 2013. Since then, it has repeatedly invested in growing this reminiscence know-how whereas bolstering manufacturing yield. Based on media experiences, SK hynix’s HBM manufacturing capability is absolutely booked by 2025.

SK hynix can be the principle provider of HBM chips to Nvidia, which instructions practically 80% of the GPU marketplace for AI purposes, a premise the place HBM reminiscence chips are strategically paired with AI processors like GPUs to beat knowledge overheads. However, Samsung, at present catching up on HBM know-how, is understood to be within the technique of qualifying its HBM reminiscence chips for Nvidia AI processors.

Throughout Nvidia’s annual occasion, GPU Know-how Convention (GTC), held in March 2024 in San Jose, California, the corporate’s co-founder and CEO Jensen Huang endorsed Samsung’s HBM3e chips, then going by a verification course of at Nvidia, with a be aware “Jensen Accepted” subsequent to Samsung’s 12-layer HBM3e system on show at GTS 2024 flooring.

HBM take a look at at Nvidia

Whereas the beginning of the week shocked the trade with an uncommon reshuffle on the high, the tip of the week got here with a much bigger shock. Based on a report revealed in Reuters on Friday, twenty fourth Could, Samsung’s HBM chips did not cross Nvidia’s take a look at for pairing with its GPUs resulting from warmth and energy consumption points.

In one other report revealed in The Chosun Day by day that day, Professor Kwon Seok-joon of the Division of Chemical Engineering at Sungkyunkwan College mentioned that Samsung has not been capable of absolutely handle high quality management of through-silicon vias (TSVs) for packaging HBM reminiscence chips. In different phrases, excessive yield in packaging a number of DRAM layers has been difficult. One other insider pointed to experiences that the facility consumption of Samsung’s HBM3E samples is greater than double that of SK hynix.

Determine 2 Based on the article revealed in Reuters, a take a look at for Samsung’s 8-layer and 12-layer HBM3e reminiscence chips failed in April 2024. Supply: Samsung Electronics

Whereas Nvidia declined to touch upon this story, Samsung was fast to state that the state of affairs has not been concluded, and that testing remains to be ongoing. The South Korean reminiscence chipmaker added that HBM, a specialised reminiscence product, requires optimization by shut collaboration with prospects. Jeff Kim, head of analysis at KB Securities, quoted within the Reuters story, acknowledged that whereas Samsung anticipated to shortly cross Nvidia’s exams, a specialised product like HBM may take a while to undergo prospects’ efficiency evaluations.

Nonetheless, it’s a setback for Samsung that would go to benefit of SK hynix and Micron, the remaining gamers within the high-stake HBM recreation. Micron, which claims that its HBM3e consumes 30% much less energy than its opponents, has introduced that its 24-GB, 8-layer HBM3e reminiscence chips shall be a part of Nvidia’s H200 Tensor Core GPUs, breaking the earlier exclusivity of SK hynix as the only HBM provider for Nvidia’s AI processors.

A impolite awakening?

Samsung, being a laggard in HBM, gained’t be the one fear for the upcoming chief Jun. Regardless of the restoration in reminiscence costs, Samsung’s semiconductor enterprise is lagging in competitiveness on numerous fronts. Based on one other Reuters report, Samsung’s high-density DRAMs and NAND flash merchandise are not forward of the competitors.

Subsequent, the Korean tech heavyweight’s foundry operation is struggling to meet up with market chief TSMC. Samsung’s chip contract-manufacturing enterprise has struggled to win massive prospects, whereas TSMC remains to be far forward by way of total market share. Then there may be the worldwide AI wave through which Samsung is at present struggling to search out its place in addition to its HBM woes.

Samsung is understood for its fierce aggressive expertise, and the appointment of the brand new chief of its semiconductor unit alerts that it means enterprise. The Korean tech large is dealing with an uphill battle in catching up in HBM reminiscence know-how, however one factor is for positive: Samsung isn’t any stranger to charting scorching waters.

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