Samsung Electronics (KRX:005930) has clinched a deal to supply cutting-edge memory chips to Nvidia Corporation in a major coup for the South Korean technology heavyweight, Korean news sites have reported.
If confirmed, it means semiconductor giant Nvidia, which this year became the latest trillion-dollar publicly listed company, is moving on from its memory chip supply deal with South Korean Samsung competitor SK Hynix.
Combined with its existing partnership with Nvidia’s main rival AMD, Samsung will command more than a 50% share in the high-bandwidth memory chip (HBM3) market.
SK Hynix is currently the market leader in HBM3, but stands to lose considerable influence should it relinquish its lucrative Nvidia tie-up.
Samsung shares surged over 6% in Seoul following the unconfirmed news, which was first announced by Korea Economic Daily citing unnamed sources.
SK Hynix shares fell 1.5%.
High-bandwidth memory is a key ingredient in Nvidia’s microchip designs, which have become a central component in artificial intelligence and deep-learning systems in recent years.
OpenAI’s landmark ChatGPT generative text model, for instance, was trained on 10,000 Nvidia units.
Citigroup analysts said: “Following its successful entrance into Nvidia’s HBM supply chain, we foresee Samsung to emerge as one of the major suppliers of HBM3…We see Samsung as a long-term beneficiary of memory and AI computing market growth.”