Tech Tumble: Samsung’s HBM Hiccup Causes Market Stir

According to Reuters on May 24, Samsung Electronics failed a test to supply High Bandwidth Memory (HBM) to NVIDIA, which has recently posted stellar performance. This was an exclusive report by Reuters, citing an anonymous source, who stated that the power consumption and heat dissipation of Samsung’s HBM were problematic.

In response, Samsung told Reuters, “HBM requires an optimization process that the customer wants and needs,” adding, “We are optimizing the product for our customers through close cooperation.” Reuters added that NVIDIA has not yet made a statement. According to the source cited by Reuters, Samsung Electronics failed the test conducted last month. Samsung has been making efforts to supply 5th generation high bandwidth memory (HBM3E) to NVIDIA since last year.

Reporting the fact, Reuters said, “If Samsung Electronics cannot meet NVIDIA’s requirements, there is a high possibility that concerns in the industry will increase,” and “Whether this problem can be easily solved is uncertain.” It added, “If Samsung Electronics cannot secure an order volume from NVIDIA, concerns among investors that it may be pushed out by SK Hynix, another HBM manufacturer in Korea, will increase.”

Indeed, SK Hynix is fiercely competing with Samsung Electronics in the semiconductor sector and is leading in the HBM sector. As a result, Samsung Electronics is perceived as a latecomer in the HBM market and is working to regain control of the semiconductor market, starting with the NVIDIA volume. However, concerns in the industry are rising due to the news of the test failure.

HBM was first produced in 2013 and its demand has exploded with the expansion of the artificial intelligence market to process a large amount of data. HBM is characterized by its chips being stacked vertically, reducing the space used and decreasing power consumption.

According to the industry, Samsung Electronics failed the 4th and 5th generation sample test for NVIDIA, but other competitors reportedly supplied 5th generation HBM products to NVIDIA last March.

On May 21, there were suspicions that the recent personnel changes in Samsung Electronics’ semiconductor business division, the Device Solutions Division, were related to the NVIDIA test.

Samsung Electronics stock price is fluctuating due to the news of failing the NVIDIA HBM test. As of 2:30 PM on the 24th, Samsung Electronics’ stock price recorded at $67. This is a decrease of 3.07% compared to the previous day, with a loss of $2.13. The trading volume reached 23,203,950 shares. Experts believe that many investors reacted immediately to Samsung’s bad news.

Recently, Samsung Electronics has been showing a rising stock price trend due to expectations of supplying volume to NVIDIA, and the number of investors expecting 80,000 electronics has increased. However, it seems difficult to achieve 80,000 electronics for the time being due to this news. Furthermore, as Samsung Electronics, the top market cap company in Korea, is faltering, KOSPI is also struggling. KOSPI fell below the 2,700 line. As of 2:30 PM, KOSPI is trading at 2,686, a drop of 1.28% from the previous day.

Meanwhile, NVIDIA has once again demonstrated its dominance and topicality in the AI market by strengthening its collaboration with Microsoft Corporation. At Microsoft’s developer conference held in Seattle, MS and NVIDIA announced that they would continue to strengthen their cooperative relationship.

Microsoft is said to optimize products, including its latest AI development model, PyTorch-3, and other small language models, to run on NVIDIA’s GPU. In addition, the two companies revealed that they would maintain a close relationship by cooperating on tasks, including developing high-performance AI apps for PCs based on RTX GPU and supporting developers making GeForce RTX.