Samsung Electronics weighing a watershed time in AI Chip and high-bandwidth memory (HBM) The company recently landed a lucrative contract for AI chips from Tesla, in the biggest win for its foundry business, but this has attracted heavy criticism for its HBM3E price strategy. • There had been speculation about a price war in the HBM3E market, but Samsung firmly rejects such intention of HBM3E prices cuts.
Oversupply Rumors and Samsung’s Response
South Korean media, including Money Today and IT Chosun reported this and added that in order to secure the overwhelming market share, Samsung provides HBM3E products at a low price. On the other hand however, Samsung, on the other hand has denied said claims, claiming that any near-term HBM3E price drop is due to over-saturation, not a strategic choice of the price.
Samsung stressed the change in supply-demand aspects, which can result in some temporary supply-demand-based alterations in HBM3E price trends, but denied the implementation of any official price-cutting policy during its July 31 earnings call.
That said, some industry analysts assert HBM3E price strategies will become aggressive by default. Samsung and Micron HBM3E shipments officially commence, with price competition being the primary driver of taking any market share away from current king SK Hynix.
Biggest Hurdle Is Still Waiting For Nvidia Approval
The more complicated challenge for Samsung is actually getting approval from Nvidia on its 12-layer HBM3E product. As it is, at the moment Nvidia, the largest customer of HNM memory, is still dependent on one supplier only: exclusively SK Hynix. While Samsung has cleared Broadcom’s tests of 8-layer HBM3E and is supplying it to AMD, it has not yet provided HBM3E that satisfies Nvidia.
Based on the news, before this Samsung had already made HBM3E price handsome discounts to attempt to get pass of Nvidia’s quality test, so this news stands from the rumors as well. But Samsung has called this a “baseless market rumor,” denying involvement in any discussion.
According to industry insiders, Samsung’s HBM business may be greatly jeopardised if the company is unable to deliver HBM3E to Nvidia by the end of 2025. That leaves the company scrambling to fix this as soon as possible, as competitors such as Micron and SK Hynix, who have already secured a cool level of trustworthiness from Nvidia for next-gen HBM memory.
HBM4 Development Intensifies Market Battle
Samsung is still busy with HBM4, despite the HBM3E challenges. The trouble is, while those are great, 1c DRAM—its method—raises concerns over its cost structure next to SK Hynix and Micron. Micron is already supplying HBM4 samples to Nvidia, and with SK Hynix in the lead, things are getting competitive really, really fast.
Samsung claims its HBM4 production is on schedule and mass production is planned for 2025, although final delivery schedules can be customer-dependent. SK Hynix, however, confirmed the start of HBM4 shipments according to its plan starting in 2026.
Rebuilding Customer Confidence
Analysts in the industry note that almost by definition Samsung’s near-term goal is clearing Nvidia’s HBM3E quality-control tests as well as gaining orders from other major customers such as AMD and Broadcom. The contest for HBM3E price and performance is largely about customer confidence, and Samsung will have to trade off aggressive pricing for product reliability.
Tesla is getting its house in order and the production lines ready for HBM4, and Samsung has a head start on the road ahead, but the past two obstacles for success in HBM3E remains the Nvidia rubber stamp along with the price dynamics.
FAQ
Samsung denies an intentional price drop in HBM3E Always decrease arises from the market oversupply.
Not yet. Samsung is yet to obtain approval from Nvidia for its HBM3E in 12-layer configuration.
SK Hynix is leading in HBM3E and also in HBM4, though second and third behind Micron and Samsung respectively.
As for HBM4, Samsung expects to initiate mass production in 2025, depending on timelines from its customers.
HBM customers→Nvidia the largest one→→ If confirmed, that would seriously limit Samsung HBM3E sales without that approval.
