Author: Heekyung Yang
SEOUL (Reuters) – Samsung Electronics plans to use chip technology promoted by rival SK Hynix, five people said, as the world’s leading memory chip maker races to catch up with rivals in making high-end chips used to power artificial intelligence.
Demand for high-bandwidth memory (HBM) chips has skyrocketed along with the growing popularity of generative artificial intelligence. But Samsung (KS:), unlike rivals SK Hynix and Micron Technology (NASDAQ:), is notable for its lack of any deal with AI chip leader Nvidia (NASDAQ:) to supply the latest HBM chips.
One reason for Samsung’s lag is its decision to stick with a chip technology called non-conductive film (NCF), which causes some manufacturing problems, while Hynix switched to mass reflow molding (MR-MUF) to address NCF weakness. According to analysts and industry observers.
However, Samsung recently placed orders for chip manufacturing equipment designed to handle MUF technology, three sources with direct knowledge of the matter said.
“Samsung had to do something to increase HBM production… introducing MUF technology is something of a pride swallow for Samsung because it ended up following the method pioneered by SK Hynix,” one of the sources said .
Samsung said its NCF technology is the “optimal solution” for HBM products and will be used in its new HBM3E chips. “We are conducting our HBM3E product business as planned,” Samsung said in response to questions from Reuters about the article.
After the article was published, Samsung issued a statement saying that “there is no truth to the rumors that Samsung will use MR-MUF in its HBM production.”
HBM3 and HBM3E are the latest versions of high-bandwidth memory chips that come bundled with mainstream microprocessor chips and help process huge amounts of data using generative artificial intelligence.
According to some analysts, Samsung’s HBM3 chip production yield is around 10-20%, trailing SK Hynix’s HBM3 chip production yield of around 60-70%.
According to one of the sources, Samsung is already in talks with material manufacturers, including Japan’s Nagase, to purchase MUF materials. But mass production of high-performance chips using MUF is unlikely to be ready until at least next year as Samsung needs to conduct more tests, the source added.
The three sources mentioned above also said that Samsung plans to use NCF and MUF techniques for its latest HBM chip.
All sources spoke on condition of anonymity because the information is not public.
Nvidia and Nagase declined to comment.
Any move by Samsung to use MUF would highlight the growing pressure it faces in the AI chip race, as the HBM chip market is expected to more than double this year to nearly $9 billion, according to research firm TrendForce. amid demand associated with artificial intelligence.
NCF VS MUF
Non-conductive film chip technology is widely used by chip manufacturers to stack multiple layers of chips into a compact, high-bandwidth memory chipset because the use of thermally compressed thin film helps minimize the space between stacked chips.
But problems often arise with adhesives as production becomes more complex as more layers are added. Samsung says its latest HBM3E chip has 12 layers. Chip manufacturers have been looking for alternatives to overcome such shortcomings.
SK Hynix successfully transitioned to mass reflow molding technology ahead of others, becoming the first supplier to supply HBM3 chips to Nvidia.
SK Hynix’s market share of HBM3 and more advanced HBM products for Nvidia is estimated at more than 80% this year, according to Jeff Kim, an analyst at KB Securities.
Last month, Micron joined the high-bandwidth memory chip race by announcing that its latest HBM3E chip would be adopted by Nvidia to power its H200 Tensor chips, which will begin shipping in the second quarter.
Samsung’s HBM3 series has not yet qualified Nvidia for supply deals, according to one of the four sources and another person familiar with the discussions.
Investors have also noticed its failure in the artificial intelligence chip race, with its shares down 7% this year, trailing SK Hynix and Micron, which are up 17% and 14% respectively.
SK Hynix shares fell 2% on Wednesday, while Samsung shares rose 1%, outpacing the broader market’s 0.4% rise.