After news broke that Samsung Electronics Co. had been awarded the contract to provide cutting-edge memory chips to AI pioneer Nvidia Corp., It hiked by more than six percent.
The top electronics manufacturer in South Korea will begin selling HBM3, a new type of memory designed to operate with artificial intelligence acceleration devices, in the fourth quarter, according to Citigroup researchers which also involves Peter Lee. Since January 2021, its share price has gone up the highest. Until today, SK Hynix Inc., the arch-enemy of Nvidia, was the only supplier of high-bandwidth memory space for its artificial intelligence accelerators.
“Following its successful entry into Nvidia’s HBM supply chain, we expect Samsung to emerge as one of the leading suppliers of HBM3,” Lee and Josh Yang wrote in a report, “Citigroup’s Value for Samsung.” The target has been increased from 110,000 Won to 120,000 Won. “We see Samsung as a long-term beneficiary of the growth of the memory and AI computing markets.”
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The Korea Economic Daily disclosed a report on Friday, quoting anonymous business sources, that Samsung reached an agreement to provide HBM3 to Nvidia shortly after its chips cleared the United States chip developer’s last-stage quality checks. According to the report, Samsung will begin providing the premium memory chips in as little as next month.
The arrival of Samsung as an extra HBM3 provider will be advantageous to Nvidia. As it broadens its possibilities, the Santa Clara, corporation based in California, whose stocks have quadrupled in worth to a total market capitalization of 1.2 trillion dollars, can see greater cost by performance as well as a more consistent supply.
A representative for Samsung turned down to comment on this topic.
On hearing the news, Samsung’s manufacturers also saw their stocks rise, with Hana Micron Inc., a company that tests and packages chips, increasing by an average per day of 30 percent. Dedak Electronics Co., a provider of printed circuit boards, increased 7.4 percent.
HBM3, which researchers believe is suited for bandwidth-hungry artificial intelligence (AI) applications, is a technology in which Hynix leads the world. The latest HBM chip will reportedly be released by Samsung sometime this year. Hynix’s stock decreased 1.5 percent on Friday after initially gaining.
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