Advanced Micro Devices, Inc (NASDAQ:AMD) signed a contract with Samsung Electronics (OTC:SSNLF) to supply HBM3E (5th generation high bandwidth memory) valued at approximately $3 billion (4 trillion won for its new data center chip, the MI350.

Samsung Electronics has agreed to provide AMD with 12-layer HBM3E DRAM, slated for mass production in the year's first half. Samsung started supplying samples to customers in February. The deal is worth about $3 billion (KRW 4.134 trillion), Viva 100 reports.

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In exchange, Samsung Electronics will purchase AMD graphics processing units (GPUs).

The supply will likely start in the second half of the year, aligning with AMD's plans to begin mass production of chips then. AMD, initially planning to release the MI350 in the second half of this year and start mass production next year, has moved the release to the second quarter.

Trend Force reports that the MI350's bandwidth has increased by over 30% compared to its predecessor, the MI300. Although AMD's chips have been recognized as having greater capacity than similar-class Nvidia Corp (NASDAQ:NVDA) chips, they were seen as inferior in bandwidth. To counter this, AMD has chosen to use HBM3E, specifically designed to enhance bandwidth.

This contract will likely be separate from Samsung Foundry operations.

Meanwhile, SK Hynix has been Nvidia's primary HBM supplier and leads the market. In April, SK Hynix announced plans to invest $3.9 billion in an advanced chip-packaging facility in West Lafayette, Indiana, focusing on mass-producing HBM.

Recently, Nvidia CEO Jensen Huang endorsed Samsung Electronics' HBM3E, signaling a potentially more collaborative relationship in the future.

Price Actions: AMD shares traded higher by 0.07% at $153.86 at the last check Friday.

Also Read: Nvidia, Broadcom Lead AI Charge: BofA Analyst Tips AMD, Micron as Emerging Contenders in Explosive Market Growth

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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