Joining Nvidia's HBM chip supply chain expected to boost Samsung's AI narrative? The market isn't buying it

Samsung's main rival SK Hynix is already supplying Nvidia with the latest version of its high-bandwidth memory, the HBM3E, and while Jen-Hsun Hwang seems to have indicated that Nvidia will also be buying some of its HBM chips from Samsung, SK Hynix has already made a huge leap forward by supplying previous generations of its technology.

It's true that Samsung Electronics is more attractive than it used to be," said Yoon Joonwon, a fund manager at DS Asset Management Co. But given expectations for its HBM business, it's too early to buy."

So far, the AI theme seems to have added more to SK Hynix, whose shares have doubled in the past year, outpacing Samsung's 30 percent gain. The difference is SK Hynix's leadership in HBM chips, which work with processors critical to training large-scale language models. Given Samsung's market share in consumer devices, it's more susceptible to the cyclical demand and pricing of traditional memory commoditization.

That's why the market was surprised when Jen-Hsun Hwang said he also plans to buy Samsung memory chips. His comments put shares of South Korea's most valuable company on track for a 10% weekly gain, the biggest since 2015.

Most people still believe that Samsung won't be favored by Nvidia for its HBM3E," said Cha So-yoon, fund manager and head of the equity team at BNK Asset Management Co. It would be good for both companies if there is an upturn in tech stock popularity, but SK Hynix doesn't seem to have lost its HBM supremacy." $NVIDIA(NVDA.US)$ $Samsung Electronics Co., Ltd.(SSNLF.US)$