Samsung Stock Surges Over 5% Following Nvidia's Interest In Its High-Bandwidth Memory Chips

The stock of Samsung Electronics Co SSNLF experienced a significant surge on Wednesday following reports of interest from NVIDIA Corp NVDA in its next-generation high-bandwidth memory (HBM) chips.

What Happened: Samsung Electronics’ shares rose by more than 5% after Nvidia’s CEO, Jensen Huang, hinted at the possibility of using Samsung’s new HBM chips for its graphics processing units. Huang praised Samsung’s HBM memory, calling it “very complicated” and “very good,” reported Korea Economic Daily Wednesday.

According to the report, Huang said, "HBM memory is very complicated, and the value added is very high. We are spending a lot of money on HBM."

Despite the positive remarks, the qualification process does not guarantee purchase. This news comes after Samsung’s competitor, SK Hynix, announced that it would be supplying its HBM chips to Nvidia, which led to a drop in SK Hynix’s stock by 3.56% on Wednesday.

HBM, a high-value and high-performance memory chip, comprises vertically interconnected multiple DRAM chips. These chips notably enhance data processing speed compared to standard DRAM products while also reducing latency, power consumption, and physical size.

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The demand for HBM is swiftly escalating due to the critical role of high-performance chips in driving AI technologies like Nvidia’s GPUs, which are pivotal in the ongoing AI revolution.

Samsung’s competitor, SK Hynix Inc., currently holds an undisputed dominance in the global HBM3 supply, controlling approximately 90% of the market.

Why It Matters: Nvidia’s interest comes at a time when the chip industry is experiencing significant growth and transformation. During the GTC 2024 event, Huang highlighted the importance of AI and the role of technology in shaping the future.

This was further emphasized by Huang’s prediction that the AI computing industry is still in its early stages and is expected to see significant growth in the coming years.

Additionally, companies like Synopsys Inc SNPS play a crucial role in the chip industry, particularly for Nvidia. Synopsys’ CEO, Sassine Ghazi, highlighted the company’s significance in the creation of graphics chips that power advanced AI technology. This further underscores the importance of chip manufacturers like Samsung and SK Hynix in the industry.

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