Samsung Electronics has replaced the head of its semiconductor division to address setbacks in its high-bandwidth memory (HBM) business. Analysts believe this change is due to Samsung’s failure to secure a leading position in the HBM market. Specifically, Samsung has been unable to supply products beyond the fourth-generation HBM (HBM3) to Nvidia, which controls over 90% of the AI semiconductor market. In contrast, SK Hynix is boosting its profitability with HBM3 and the emerging fifth-generation HBM (HBM3E) dominating the AI memory market.
Samsung’s past missteps, including underestimating the HBM market’s potential and being complacent in developing next-generation HBM, have proven costly. Reports indicate that Samsung has repeatedly failed Nvidia’s sample tests, while SK Hynix began shipping HBM3E 8-layer products to Nvidia in March and is currently certifying its 12-layer products. The gap in market share between the two companies is widening, with SK Hynix holding 59% and Samsung 37% of the HBM market in the first quarter, according to Meritz Securities.
As Samsung’s competitive edge diminishes, cynical remarks have emerged within its semiconductor division, such as, “We are SK Hynix’s subcontractor.” An employee from Samsung’s Device Solutions (DS) Division mentioned that “SK Hynix has become the global main supplier in the HBM market, while Samsung is only picking up the excess orders that SK Hynix cannot handle.” Another employee noted, “We often talk among colleagues that the golden days of dominating the semiconductor market are over. The lack of leadership in anticipating market trends is the problem.”
The industry’s evaluation of Samsung’s HBM competitiveness is becoming more critical. Experts predict that Samsung might only be able to supply HBM3E 8-layer to Nvidia by the third quarter at the earliest, and the 12-layer version by the fourth quarter. Hyundai Motor Securities analyst Roh Geun-chang said, “Even if Samsung missed the initial HBM market, they have failed to supply Nvidia for over a year, leaving no more room for excuses. This shows that Samsung is technically behind compared to SK Hynix.”
Roh further commented, “Although Samsung is developing Mach-1 and QLC to respond to the AI semiconductor market, it will be difficult to regain their former reputation if they continue to lag in HBM and another critical sector, foundry.”
In the foundry business, Samsung is struggling to attract major customers and cannot close the gap with Taiwan’s TSMC. According to TrendForce, Samsung’s foundry market share in the fourth quarter last year was 11.3%, while TSMC’s was 61.2%, with the gap widening from 45.5 percentage points in the previous quarter to 49.9 percentage points.
Lee Jong-hwan, a professor at Sangmyung University’s Department of System Semiconductor Engineering, suggested, “The leadership change could be a response to the growing gap with SK Hynix in the HBM sector.” He also mentioned, “TSMC’s recent collaboration with SK Hynix in the HBM business likely heightened the sense of crisis within Samsung.”
Lee said, “If Samsung fails to move beyond its traditional DRAM and NAND flash strategies, HBM could become its Achilles’ heel in the AI semiconductor era.”
