Nvidia Corp. (NASDAQ:NVDA) is nearing the completion of the certification process for Samsung Electronics Co Ltd’s (OTC:SSNLF) high-bandwidth memory (HBM) chips. This step is crucial for Samsung to begin supplying components essential for training AI platforms.
During a presentation at Computex in Taipei, Nvidia’s CEO Jensen Huang disclosed that the company is currently assessing HBM chips from both Samsung and Micron Technology Inc. (NASDAQ:MU). According to Bloomberg, Nvidia’s approval is vital for these companies to compete with Korean chip supplier SK Hynix Inc.
SK Hynix has experienced a stock surge due to its supply of advanced HBM3 and HBM3e chips to Nvidia. In contrast, Samsung is lagging in the HBM market, which has expanded significantly with the rising demand for training AI models like ChatGPT.
Although Samsung’s HBM product has not failed any qualification tests, Huang mentioned that it requires further engineering work.
“We just have to do the engineering. It’s just not done,” Huang said. “I want it to be done by yesterday. But it’s not done yet. We have to be patient.”
Following Huang’s comments, Samsung’s shares increased by up to 4.1% in after-hours trading in Seoul.
There is investor concern about Samsung’s ability to catch up with SK Hynix, which has seen its fastest revenue growth since 2010. This worry has prompted a leadership change in Samsung’s semiconductor division, underlining its effort to regain competitiveness.
Samsung has commenced mass production of its latest eight-layer HBM3E and plans to produce 12-layer versions by the second quarter. The company aims to triple its HBM supply in 2024 compared to the previous year. Meanwhile, SK Hynix is expanding significantly, with investments of about $14.6 billion in a new South Korean complex and $4 billion in a packaging facility in Indiana, its first in the U.S.
With SK Hynix’s production capacity nearly fully booked for the next year, Nvidia benefits from having Samsung as a strong alternative supplier.
Over the last 12 months, Nvidia’s stock has surged by more than 195%. Investors can gain exposure to Nvidia stock through the VanEck Semiconductor ETF (NASDAQ:SMH) and the Grizzle Growth ETF (NYSE:DARP).
Price Action: At the last check on Tuesday, NVDA shares were trading slightly lower by 0.12%, at $1,148.21.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
