South Korean tech giant Samsung Electronics is behind in the AI race – at least in the first round.

It would be foolish to exclude it, though. Recent indications suggest that it may be closing the technology gap with rivals SK hynix and Micron in high-performance AI memory chips. Even if it takes longer than expected to catch up, the tightening of the overall memory market brought on by the AI boom could still be a significant driver for Samsung.

Since Since the rise of generative AI applications like ChatGPT, Nvidia's AI chips have been selling well. In turn, memory chip makers have sold their high-performance products to Nvidia and other companies. High-bandwidth memory (HBM) provides enhanced data processing speeds, which are essential for AI digital processing.

Korean SK hynix took the lead early in HBM. It is actually the sole supplier of Nvidia's latest generation of memory chips, HBM3. Samsung only started mass production of HBM3 in the second half of last year. It does produce the previous generations of HBM chips used by some of the slower AI chips , rather than the most cutting-edge chips made by Nvidia.

NowSK hynix has started mass production of its next-generation chip, called HBM3E. SK's smaller rival, Micron, has essentially skipped the previous generation and is doing the same. Both companies said that HBM has sold out all of its production this year and has already begun to fulfill next year's orders.

Even so, Samsung is still trying to catch up. The company expects mass production of next-generation HBM chips in the first half of this year. This will put it behind its competitors in one fiscal quarter (rather than a full year) (as with the previous generation of HBM chips).

In addition, according to Japan's Nikkei, on March 19, Nvidia CEO Jensen Huang said that the company is testing Samsung's next-generation HBM chips. Fun fact: In March, Huang wrote "Jensen Approved" along with his signature at Samsung's HBM3E product showcase at Nvidia's AI conference.

Samsung must ensure that its products meet standards while increasing production capacity. But given the extremely tight supply situation, Nvidia has every reason to need additional suppliers.

If Samsung does manage to catch up, it could enter the fast-growing memory market.

Bernstein Research estimates that HBM sales will account for 16 percent of the industry's total revenue this year, a chip used as working memory. In a March 22 report, Goldman Sachs raised its forecast for the future HBM market to 230 in 2026 $100 million: This will be a 10-fold increase from $2.3 billion in 2022.

But as more capacity is used to make these high-margin chips,The surge in demand for HBM chips will also help keep the overall memory market tight. This shift will benefit Samsung, which has a cost advantage over its peers in traditional memory products. The increasing use of AI applications may also require more powerful devices and higher memory capacities.

Samsung's share price lags significantly behind its competitors SK hynix and Micron, both of which have more than doubled their shares since the beginning of last year. Part of the reason is that Samsung is not a pure memory chip company. But it also reflects the slow pace of HBM's progress.

Samsung, as the leader in the entire memory market, now finds itself in an awkward position of playing catch-up. It's expensive to sustain such a sprint, but the overall memory market is tightening and Nvidia's potential help will be a big help.

South Korean chip companies, won hemp

Amid the global AI boom, there are forecasts that the recovery of South Korea's memory exports could boost Samsung Electronics andSK hynix's results for the first quarter.

According to the research institute owned by BloombergBloomberg Intelligence reported that senior analyst Masahiro Wakasugi recently explained in a report titled "South Korea's Memory Chip Export Recovery" that South Korea's DRAM exports maintained an upward trend for four consecutive months compared with the same period last year until February. According to the Ministry of Trade, Industry and Energy, DRAM exports were valued at US$2.4 billion in February, up 90% year-on-year and 12% month-on-month.

The report cites market research firmsAccording to Gartner, the DRAM market share by bit supply was led by Samsung Electronics at 39% in the third quarter of last year, followed by SK hynix (34%) and Micron (). 23%） 。 Considering the recovery trend of DRAM exports, the report predicts a strong rebound in revenue for South Korean companies in the first quarter.

In addition, last month South KoreaNAND flash exports rebounded significantly, reaching a record $890 million, up 82% year-over-year and 3% month-on-month. As of 2022, South Korean companies, including Samsung Electronics with a 35% market share and SK hynix with an 18% market share, will dominate NAND Market share.

Market research companyTrendForce forecasts that NAND average selling price (ASP) will continue to rise by 13% in Q2, following a 23% to 28% QoQ increase in Q1 to 18%. As a result, the positive trend is likely to continue in the revenue of Korean companies in the NAND space.

In line with this trend, Samsung Electronics' preliminary first-quarter results, which will be announced on April 5, are expected to rebound. Samsung Electronics' consensus operating profit for the first quarter of this year was 5.03 trillion won ($3.71 billion), according to financial information provider FnGuide. This represents an increase of 685.7% compared to 640.2 billion won in the same period last year. Quarterly revenue is also expected to recover to the 70 trillion won range for the first time in five quarters. Samsung Electronics' revenue consensus for the first quarter of this year was 72.32 trillion won. Revenue remained in the range of 60 trillion won for all quarters of last year.

SK hynix's operating profit for the first quarter of this year was also revealed to be 1.37 trillion won. However, KB Securities' expectations are higher, with an expected operating profit of 2.1 trillion won. In the same period last year, SK hynix recorded an operating loss of 3.4 trillion won. However, in the fourth quarter of last year, an operating profit of 346 billion won was achieved, ending an operating loss that had been going on since the fourth quarter of 2022.