Samsung has lowered expectations from its HBM business, as the firm has been suffering from inconsistent HBM yields and not securing business opportunities.
Samsung's HBM3E Process Has Been A Victim of Low Yield Rates, Which Has Driven Away NVIDIA's Adoption
Samsung and its HBM venture have been through a rollercoaster of a ride, with the Korean giant initially being highly optimistic towards its HBM3 products, hoping to supply to the likes of NVIDIA. The rumor mill did revolve pretty fast in the whole fiasco, where it was initially claimed that Samsung's HBM3 is full of flaws, but then NVIDIA's CEO himself refuted this, saying that they are working with Samsung to conclude. But, in a recent earnings call, Samsung disclosed that their HBM business hadn't met expectations, and now, the aftershocks have started to arrive.
In a new report by the Korean media outlet ZDNet Korea, Samsung has reportedly adjusted its maximum HBM production capacity figures, dropping it down to 170,000 units per month for next year, which was initially at 200,000 units.
This comes when the demand for HBM is at its all-time high, especially from the likes of NVIDIA and AMD, as they head into the era of next-gen AI accelerators. The more surprising element here is that competitors such as SK hynix are determined to upscale HBM production, and seeing Samsung cut down its output shows that the firm isn't too confident with this particular segment.
For now, it isn't certain that Samsung has written off the HBM partnership with NVIDIA, but the delay in passing qualification tests and competitors getting higher adoption rates has driven off the confidence of investors, which is why the Korean giant says that their HBM business is "sluggish" right now. Samsung's HBM business has its sight set on mass supply to NVIDIA once the coast clears and the Korean giant manages to tap into Team Green's supply lines, and through this, the firm will later decide on scaling up investment.
The HBM situation has emerged as another roadblock for Samsung's business, given that the firm's foundry division is also a victim of low yield rates. The Korean giant needs to work tremendously to compete with market alternatives, and given the company's progress based on the current earnings call, Samsung has a long way to go.
