As High Bandwidth Memory (HBM), essential for powering generative AI, emerges as the main battleground in the next generation of memory semiconductors, fierce competition is brewing between Samsung Electronics and Micron to snatch the Nvidia orders currently monopolized by SK hynix.
On Nov. 28, the Taiwanese market research firm TrendForce predicted that Nvidia would complete its validation of Samsung Electronics’ HBM3 by next month. Industry insiders believe that Samsung Electronics, currently supplying HBM3 samples to Nvidia, could secure a formal contract depending on the validation results next month.
Nvidia’s Graphics Processing Units (GPUs), especially the high-end H100 model, are high-value products priced at 60 million won each. This high profitability makes Nvidia a potential game changer in the memory semiconductor sector. SK hynix, a leader in the HBM market, has been exclusively supplying HBM3 to Nvidia since last year, gaining a lead over Samsung Electronics. This move helped SK hynix narrow its market share gap with Samsung, the leader in the DRAM market, by 4.4 percentage points. SK hynix’s DRAM business, previously in a deficit, turned profitable in the third and fourth quarters of this year, buoyed by the performance of high-value products like HBM and DDR5.
The industry anticipates a full-scale “War of the Three Kingdoms” in HBM, as U.S. memory chipmaker Micron is set to mass-produce its fifth-generation HBM3E products next year. Intense competition is expected among the three companies for the HBM3E supplies needed for Nvidia’s upcoming H200 and B100 AI semiconductors.
With Nvidia reportedly planning to diversify its HBM suppliers for more efficient supply chain management, SK hynix’s solo run may end, ushering in an era of unlimited competition. According to TrendForce, starting with Micron in July, followed by SK hynix in August and Samsung Electronics in October, all three companies have supplied HBM3E samples. Considering Nvidia typically takes about six months to validate HBM samples, the contours of the supply volumes are expected to emerge next year.
Hwang Min-sung, an analyst at Samsung Securities, noted, “From the second and fourth quarters of this year, SK hynix’s HBM has been a significant differentiator from competitors, with the gap widening in the third and fourth quarters. Unlike usual memory generations that transition in 1.5 to 2 years, HBM transitions in just 1 year, giving an advantage to market leader SK hynix.” SK hynix has recently closed the gap in DRAM market share with industry leader Samsung Electronics to 4.4 percentage points.
Samsung Electronics, the “chaser,” is planning a turnaround with its “super-gap” technology. At the “Memory Tech Day” held in Silicon Valley last October, Samsung Electronics unveiled its “Shinebolt” HBM3E DRAM and announced plans to expand its market share through turnkey (end-to-end) production as an Integrated Device Manufacturer (IDM). Additionally, Sang-jun Hwang, senior vice president and head of the DRAM Development Office at Samsung Electronics’ Memory Business Division, revealed last month that sixth-generation HBM, HBM4, is under development with a supply target of 2025.