Samsung Electronics is said to have stabilized the performance and Production yield of its fifth-generation high bandwidth memory (HBM) HBM3E—especially the highest-spec 12‑high product—and will expand supply volumes after nearly two years of struggling to secure performance. Major overseas investment banks and market research firms had initially projected that SK hynix would exclusively supply or be the main supplier of HBM3E 12‑high for Google's next-generation tensor processing unit (TPU). Recent developments have reportedly shifted quickly, with talks moving toward increasing Samsung Electronics' share.
According to industry sources on the 15th, Samsung Electronics' share of supplying HBM3E 12‑high products to Broadcom, which is designing Google's TPU, is expected to increase. Google is equipping its latest seventh-generation TPU with HBM3E 8‑high from Samsung Electronics and SK hynix, and plans to fit the enhanced seventh-generation (TPU 7E), which offers a step up in performance, with HBM3E 12‑high. Mass-production product testing is underway, and both companies are said to have reached nearly identical levels in terms of performance.
Over the past year, Samsung Electronics' HBM3E 12‑high product failed to clear the quality testing hurdle of Nvidia, the industry's largest buyer. This has also been a reason Samsung Electronics has consistently trailed SK hynix in the global HBM market. To boost the performance of its HBM3E products, Samsung Electronics, under the leadership of DRAM development head Hwang Sang-jun, devoted significant effort to the field, going so far as to redesign the DRAM (D1a) used in HBM, and is said to have stabilized performance this year through collaboration with Broadcom.
There is a significant difference in product profitability and performance between HBM3E 8‑high and 12‑high. A senior Samsung official said, "When Samsung Electronics was struggling to obtain Nvidia's HBM product certification in the past, Samsung Electronics' management visited CEO Jensen Huang to request status as a main supplier, and Huang responded, 'If you want to be the top-priority vendor, implement the latest HBM product in a 12‑high stack,'" adding, "That is how important HBM3E 12‑high is for improving GPU performance and running large language models (LLMs)."
One reason Samsung Electronics stabilized HBM3E 12‑high performance and Production yield is its partnership with Broadcom, which is designing Google's TPU. Broadcom takes a more memory‑semiconductor‑friendly stance than Nvidia. Unlike Nvidia, which continually demands redesigns and performance improvements from Samsung Electronics and SK hynix to push AI Semiconductor performance to the extreme, Broadcom designs system-on-chip (SoC) in-house to match only the specifications requested by customers, which also reduces the burden of quality testing.
An engineer at Broadcom said, "There is a view in the industry that sees Broadcom as a rival to Nvidia, but that is only half right. Broadcom's corporate identity is closer to a 'design house,' and we design chips to the specs that customers like Google want at the most reasonable cost while making the most profit," adding, "This is why Broadcom internally prefers Samsung, which can offer larger volumes at lower prices, and at the same time it is the secret to increasing price bargaining power with SK hynix."
As Nvidia's GPU prices and operating expenses have skyrocketed, Big Tech firms have begun allocating more expense to investments that reduce reliance on Nvidia. In response, starting this year Broadcom has chosen Samsung Electronics as a strategic partner over SK hynix, which set HBM prices high enough to yield an operating margin of about 70%, to cut the design and manufacturing costs of custom chips like TPUs.
Meanwhile, Samsung Electronics is said to have responded flexibly on performance and price negotiations to overcome its disadvantage against SK hynix in the HBM3E market. In particular, Samsung Electronics is reported to have lowered the supply unit price by about 20% compared with the HBM3E products SK hynix is supplying.