Samsung's new Galaxy innovation space opens on Paris's Champs-Élysées. Yahoo
Chinese tech companies, including major players like Huawei and Baidu, as well as various startups, are rapidly stockpiling high bandwidth memory (HBM) chips from Samsung Electronics. This surge in purchases comes in response to anticipated new U.S. export restrictions targeting these crucial components, according to multiple sources.
Since the beginning of the year, Chinese firms have been intensifying their buying efforts for HBM semiconductors, which are vital for advanced artificial intelligence (AI) applications. This increased demand has led to China accounting for about 30% of Samsung's HBM chip revenue in the first half of 2024. This trend reflects China’s determination to maintain its technological progress amidst escalating trade tensions with the U.S. and other Western countries.
The U.S. is expected to announce a new set of export controls this month, which will likely impose tighter restrictions on the export of high-bandwidth memory chips to China. These measures are part of broader efforts to safeguard U.S. national security and protect its technological interests. The specifics of these restrictions, including their potential impact on China, remain unclear as the U.S. Department of Commerce has yet to provide detailed comments on the matter.
HBM chips are essential for building advanced processors used in generative AI technologies, such as those developed by Nvidia. Currently, three major manufacturers produce HBM chips: Samsung and SK Hynix from South Korea, and Micron Technology from the U.S.
Chinese demand has predominantly been for the HBM2E model, which is two generations behind the most advanced HBM3E chips. Due to the global surge in AI applications, there has been a notable shortage of the latest HBM3E models. Nori Chiou, an investment director at White Oak Capital Partners, noted that China’s high demand for Samsung’s HBM chips is driven by the limited availability of advanced models and the fact that American AI companies have already secured capacity with other manufacturers.
While the exact quantity of stockpiled HBM chips in China is difficult to determine, various sectors, including satellite manufacturers and tech giants like Tencent, have been actively acquiring these chips. For instance, the chip design startup Haawking recently placed an order for HBM chips from Samsung, and Huawei has been utilizing Samsung's HBM2E chips for its Ascend AI chips.
Despite some progress by Chinese firms in developing their own HBM chips, such as Huawei and CXMT working on HBM2 models, these efforts could be affected by the new U.S. regulations. Restrictions on HBM sales to China might impact Samsung more significantly compared to its competitors. Micron has already halted its HBM sales to China, while SK Hynix, which mainly produces advanced HBM chips, has reported that its HBM inventory is sold out for this year and nearly depleted for 2025.
