(Bloomberg) -- Samsung Electronics Co., after a series of setbacks in developing the type of memory chips crucial for the artificial intelligence market, is ...
-- Samsung Electronics Co., after a series of setbacks in developing the type of memory chips crucial for the artificial intelligence market, is beginning to make progress in narrowing the gap with rival SK Hynix Inc. Samsung has made important headway in its comeback, including winning the long-awaited approval from AI giant Nvidia Corp . for a version of its high-bandwidth memory chips called HBM 3, according to people familiar with the matter.
The pair anointed Samsung their top stock pick in the report because they figure the company could grab incremental HBM market share of at least 10% in 2025, adding about $4 billion in revenue. While it would still trail SK Hynix in the field, that progress could shift investor perceptions and lift shares.
While SK Hynix was ready for the surge, Samsung struggled with the complex engineering problems of the new chips. HBM is made up of a collection of DRAM chips stacked on top of each other, eight high in the most recent generation. Each layer generates substantial heat, and then they are packed with Nvidia’s graphics processing unit, or GPUs, which can reach 100 degrees C on their own. The entire stack risks melting down without the proper dissipation and cooling materials.
Samsung risked falling behind not just on memory chip technicalities, but also in terms of urgency in innovation. To boost collaboration, he reorganized the team dedicated to HBM and appointed a new head. Samsung said that Jun, since taking over, has prioritized the company’s culture of collective discussion and persistence in solving problems. It added there has been “no issue related to heating and power consumption in our HBM products” and it has made “no design changes” for specific customers.
“Samsung is late, but the window of HBM3E will remain open for Samsung to catch up,” the analysts, led by Mark Li, wrote. SK Hynix isn’t letting up. It’s in the rare position of stealing the spotlight from its higher-profile rival — its shares have surged more than 150% since the start of 2023, more than triple Samsung’s performance.
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