(Oct 31): Samsung Electronics Co is making progress in winning certification from Nvidia Corp for its most advanced artificial intelligence (AI) memory chips, according to an executive, pushing the South Korean company’s stock up as much as 3.6%.
The once-dominant memory maker is fighting to get its latest chips certified by Nvidia to help AI accelerators work. That’s provided an unusually long window for rivals SK Hynix Inc and Micron Technology Inc to carve out a commanding lead in the booming high-bandwidth memory (HBM) arena.
But the company now expects to sell its highest-margin and most advanced HBM3E chips to the customer in the fourth quarter, with the company making “meaningful” progress in the qualification process with a major customer, Jaejune Kim, the executive vice-president of Samsung’s memory business, said on an earnings call.
Shares of SK Hynix fell as much as 4.6% after the remarks.
Profit at Samsung Electronics Co’s mainstay semiconductor operations missed market expectations, reflecting the South Korean tech leader’s struggles to catch up in lucrative AI chips. Its semiconductor division — typically the biggest contributor to profit — earned just 3.86 trillion won (US$2.8 billion or RM12.24 billion) in operating profit in the September quarter, shy of a 6.66 trillion won estimate.
That’s as SK Hynix posted a record operating profit of 7.03 trillion won last week with plans to supply its 12-layer HMB3E in the current quarter.
South Korea’s largest company has so far missed the lion’s share of surging demand related to AI and data centre servers. It also remains exposed to weak mobile chip sales, even as it faces rising supply of legacy chips in the Chinese market. Demand for its smartphone chips is expected to stay weak next year, executives said.
The company is now cutting production of its legacy memory products in an effort to speed up conversion to cutting-edge manufacturing processes, Kim said. Its memory-related capital expenditures will prioritise high-end products, he said. Total chip-related capital expenditures are expected to total 47.9 trillion won this year, and Samsung now expects to mass produce next-generation HBM4 chips in the second half of next year.
Uploaded by Tham Yek Lee