Samsung eyes Nvidia partnership to boost advanced chip shares

(Executive Vice President Han Jin-man Instagram)

Samsung Electronics is edging closer to a pivotal milestone in advanced chips.

The South Korean tech giant reported significant advancements in high-end chip production and is nearing a major supply deal, signaling its potential as a new supplier for Nvidia Corp.

During its third-quarter earnings call on Thursday, Samsung Electronics added, “We are now supplying the latest generation HBM3E 8 and 12-layers and have achieved a key milestone in quality testing for a major client.” The company hinted at increases in HBM sales in the fourth quarter of 2024, with Nvidia Corp as a primary customer.

Investors focused on the company’s HBM supply prospects during the earnings announcement. Nvidia, the world’s largest GPU producer, is looking to expand its supply chain to support the demand for its upcoming AI chip, Blackwell. Although Nvidia’s needs have been met by SK hynix to date, the rising demand for AI chips has created an urgent need for additional suppliers, providing Samsung Electronics with a critical opportunity.

A latecomer to advanced chips, Samsung Electronics has been struggling to catch up with local rival SK hynix. The company issued a rare public apology in its third-quarter 2024 earnings for the recent performance that fell short of market expectations.

Chips are the backbone of Korea’s economy, making up 20 percent of its exports; a competitive AI chip industry is critical for Samsung Electronics and the nation’s economy. With the fast pace of technological advancements, there is still room for Samsung Electronics to grow into a stronger position.