According to Reuters, Samsung Electronics' latest high-bandwidth memory (HBM) chip has not passed Nvidia's tests, causing Samsung Electronics' stock price to drop on Friday.
Samsung Electronics Co. fell 2.3% to 76,500 won, hitting a one-month low. The decline in its stock caused South Korea's benchmark KOSPI index to drop nearly 1%.
Reuters reported that Samsung's HBM and HBM3E chips—its most advanced, designed for AI processing units—have not met Nvidia's standards due to heat dissipation and power consumption issues.
This suggests that Samsung might face delays in capitalizing on the rapidly growing AI industry demand and potentially lag behind its competitor SK Hynix Inc. (KS:000660), which currently is the sole supplier of advanced HBM3E chips in the market.
For contract chip manufacturers like Samsung, meeting Nvidia's requirements is crucial because the American company holds more than 80% of the market share for advanced AI processors. Nvidia also produces the most advanced AI processors on the market.
American competitor Micron Technology Inc. has also recently announced that it will begin producing advanced HBM chips. As AI development intensifies, the demand for these chips is expected to grow sharply.
Samsung is the world's largest memory chip maker. Although the company has benefited from increased AI-driven demand in recent quarters, this trend might change if it loses market share in the advanced HBM sector to competitors like Micron and SK Hynix.
