Samsung Electronics' latest high bandwidth memory (HBM) chips have reportedly failed the tests conducted by Nvidia (NASDAQ:NVDA) for use in its AI processors. The failure is attributed to issues related to heat and power consumption.
What Happened: The problems are linked to Samsung's HBM3 chips, which are extensively used in graphics processing units (GPUs) for artificial intelligence, Reuters reported on Friday. The upcoming fifth-generation HBM3E chips are also affected. This is the first time such issues have been reported.
Nvidia, holding approximately 80% of the global GPU market for AI applications, is a significant customer for HBM manufacturers. Samsung has been striving to pass Nvidia's tests for HBM3 and HBM3E since last year.
The recent failures have sparked concerns among industry insiders and investors about Samsung's competitive stance against rivals SK Hynix and Micron Technology (NASDAQ:MU).
Why It Matters: The development comes on the heels of a speculation that AI could boost Samsung's stock performance, despite the challenges with HBM.
While Samsung faces these issues, SK Hynix continues to supply Nvidia with HBM chips. Micron has also pledged to provide Nvidia with HBM3E. Samsung's struggles have led to a leadership change in its semiconductor unit this week.
Despite the setbacks, Samsung continues to supply other customers like Advanced Micro Devices and plans to commence mass production of HBM3E chips in the second quarter. In late April, Samsung announced its plans to mass-produce the groundbreaking 5th Gen HBM3E chip to advance AI innovation.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari