Q4 Starts Selling Shovels to NVIDIA? Samsung Soars Over 6%

Is Samsung about to "join" Nvidia's "AI circle of friends"?

On Friday, Samsung Electronics' stock price rose by more than 6%, marking the largest increase since January 2021. Citigroup previously stated in a report that Samsung Electronics will become the main supplier of Nvidia's HBM3 memory chips.

Analysts from Citigroup, including Peter Lee, stated in the report that they expect Samsung to supply HBM3 to Nvidia starting from the fourth quarter, and they have raised the target price from 110,000 Korean won to 120,000 Korean won, maintaining a buy rating.

Analysts said, "If Samsung Electronics successfully enters Nvidia's AI chip supply chain, by 2024, Samsung will supply up to 30% of Nvidia's HBM3."

Previously, the main supplier of Nvidia's HBM3 was another Korean chip company, SK Hynix, which has risen by nearly 60% this year.

Wall Street News previously mentioned that as one of the world's largest memory chip manufacturers, SK Hynix has long been committed to developing powerful memory chips. In 2013, SK Hynix and AMD were the first to introduce the first-generation HBM product to the market. HBM1 has higher bandwidth than DDR4 and GDDR5 products, while having a smaller form factor and lower power consumption, making it more suitable for processors with high bandwidth requirements such as GPUs.

HBM vertically stacks multiple DRAMs, significantly improving data processing speed. Park Myeong-jae, the head of advanced process memory chip product design at SK Hynix, said that this field was considered an "unknown territory" at that time.

As the demand for cutting-edge GPUs in the industry continues to rise, the demand for high-performance HBM chips is also increasing rapidly. Market research firm TrendForce previously predicted that HBM demand will grow by 58% YoY in 2023, and is expected to further increase by 30% in 2024.

For a long time, SK Hynix has been a major participant in the ups and downs of the memory chip industry, but it has not been regarded as an industry pioneer in history. Now, with the rise of AI applications relying on HBM, SK Hynix has become one of the early winners in the hardware field, although competition is intensifying and its competitor Samsung Electronics is trying to catch up.

After the release of the Citigroup report, SK Hynix's stock price rose slightly in early trading on Friday and then fell back, currently down by about 1%.