Samsung shares rise on hopes of Nvidia using its new-gen memory chips

A logo of the Samsung Electronics Co. is seen at its office in Seoul, South Korea, Wednesday, Jan. 31, 2024.
A logo of the Samsung Electronics Co. is seen at its office in Seoul, South Korea, Wednesday, Jan. 31, 2024. Copyright Ahn Young-joon/Copyright 2023 The AP. All rights reserved.
By Indrabati Lahiri
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Samsung could be joining the likes of SK Hynix, the world’s second biggest memory chip producer, as one of Nvidia’s suppliers.

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Tech giant Samsung Electronics’ shares jumped 5.16% on Thursday to €1,325, following reports that Nvidia was currently testing the former’s new-generation high-bandwidth memory (HBM) chips.

The HBM3E chip, Samsung’s fifth-generation chip, was launched last month. It is the industry’s first 36-gigabyte (GB) 12- stack high-performance, high-value memory chip. Such chips are seeing soaring demand because they speed up data processing while, at the same time, decrease size, latency and power consumption.

As such, they are crucial for artificial intelligence (AI) chips such as Nvidia’s graphics processing units (GPUs), which are also pivotal in taking the AI revolution further. Thus, right now, the testing process mainly focuses on whether the Samsung chips are up to Nvidia’s standards and requirements, in connection with its GPUs.

Nvidia CEO and co-founder Jensen Huang was reported as saying by the Korea Economic Daily: “High bandwidth memory is very complicated and the value added is very high. We are spending a lot of money on HBM.”

Speaking in praise of Korean-owned Samsung, Huang added: “Samsung is very good, a very good company.”

Chip market competition heats up

Huang’s comment has led to increased speculation that Nvidia may potentially end up using Samsung’s chips, along with Samsung rival SK Hynix’s, although the company is under no formal obligation to do so.

SK Hynix’s shares plunged 9.40% to €106 on Thursday afternoon. At present, the company accounts for approximately 90% of worldwide HBM3 chip supply and is the second largest chip producer globally.

It had also previously announced that it was already mass producing HBM3E chips, in an industry first, in order to supply to Nvidia. However, now that Samsung is also investing heavily in HBM3E chips and could potentially also supply to Nvidia, SK Hynix may see its market share being undercut.

Samsung is also currently working on its Galaxy Ring, a smart ring, designed to compete with the Oura Ring and go live late this summer. Although the company has been tight-lipped about the exact functions of the Galaxy Ring, investors expect that, along with traditional fitness and health tracking features, it will also possibly include recipes and meal-planning suggestions.

Nvidia bags world’s most innovative company title

Nvidia was recently named by business and innovation brand Fast Company as the world’s most innovative company, describing it as: “Nvidia isn’t just in the business of providing ever-more-powerful computing hardware and letting everybody else figure out what to do with it.

“Across an array of industries, the company’s technologies, platforms, and partnerships are doing much of the heavy lifting of putting artificial intelligence (AI) to work. Even for AI’s titans, building on what Nvidia has created - the more ambitiously, the better - is often how progress happens.”

Nvidia’s CEO, Jensen Huang was also elected to the US National Academy of Engineering.

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