As Samsung Electronics proceeds with supplying high-bandwidth memory (HBM) to Broadcom, the world's largest application-specific integrated circuit (ASIC) design corporation, it is said to have posted better-than-expected results in recent quality and performance tests of next-generation HBM. Analysts say the company is aligning with Broadcom's interests, which require cost-effective and customized AI Semiconductor design, by touting lower prices than SK hynix and the ability to supply in large volumes.
According to the industry on the 3rd, HBM4, the sixth-generation HBM that Samsung Electronics will begin supplying in earnest next year, is said to have exceeded the original targets in Broadcom's performance tests. Samsung Electronics' HBM currently mounted on Google's tensor processing unit (TPU) through Broadcom is the fifth-generation HBM3E, and mainly eight-layer products are supplied. Samsung Electronics guaranteed larger volumes at lower prices than SK hynix, and it is steadily increasing its share as it passes quality tests without a hitch.
The key is HBM4, which will determine the HBM market landscape next year. For HBM4, where Samsung Electronics and SK hynix are competing on equal footing, there are significant structural changes from existing products and major improvements are expected in performance. Samsung Electronics, which lagged behind SK hynix through this year, has sought differentiation to boost HBM4 performance by advancing DRAM and logic dies. So far, the mainstream view in the semiconductor industry is positive.
A source familiar with Broadcom said, "While rivals received HBM4 redesign feedback from Nvidia this year and have recently continued discussions for performance improvements, there has been no notable noise from Samsung Electronics," adding, "Considering that previous generations of Samsung's HBM products faced issues such as heat generation and power leakage, there is a high possibility things will change starting next year."
According to Counterpoint Research, Samsung Electronics held second place with a 40% share of the HBM market as recently as the fourth quarter of last year, but it plunged to 15% in the second quarter of this year. It suffered the humiliation of falling to third place behind SK hynix (64%) and Micron (21%). However, the situation began to change in the second half of this year. Multiple overseas investment banks have started releasing reports saying Samsung Electronics' share is steadily increasing, and recently there are even projections that it will supply more volume than SK hynix.
On top of that, from next year, when Google's TPU volumes ramp in earnest, Samsung Electronics is expected to cement a more favorable position. Kim Dong-Won, an analyst at KB Securities, said, "Google's seventh-generation TPU this year uses the fifth-generation HBM3E, and next year's eighth-generation model will use the sixth-generation HBM4," adding, "Samsung Electronics will supply Google with more than double this year's volume next year." The industry estimates that within Google this year, Samsung Electronics and SK hynix are splitting HBM supply roughly equally or with a slight lead, and is even predicting a possible reversal next year.
Industry sources also say Samsung Electronics is better positioned to build economies of scale through mass supply. SK hynix, with limited DRAM production capacity, is serving as the primary HBM supplier to major big tech companies including Nvidia, making it difficult to secure additional capacity immediately, whereas Samsung Electronics is known to be able to supply more volume thanks to easier capacity expansion, including new lines at its Pyeongtaek campus.