Samsung is struggling to catch up to cross-town rival SK Hynix in the race to supply lucrative high-bandwidth memory HBM3E chips to customers amid the AI boom. It has remained unable to secure a huge contract from NVIDIA which has so far sourced these chips for its AI accelerators from SK Hynix.
The Korean giant is also focusing on the sixth-generation HBM4 chips in a bid to reclaim its dominance. To that end, it could get a huge favor from Elon Musk's Tesla, assuming the car company finds its HBM4 prototype to be suitable for its purposes.
Tesla's in the market for HBM4 chips
A new report out of South Korea highlights that both Samsung Electronics and SK Hynix are developing HBM4 prototypes for Tesla as the carmaker looks to develop its own AI chips. Tesla has reportedly asked both Korean memory makers to supply the HBM4 chips for general use and it will pick either of the two as the main supplier after testing samples.
Tesla will likely use these high-bandwidth memory chips for Dojo, its custom supercomputer that's designed to train its self-driving neural networks. These memory chips may also be used for Tesla'a other AI ambitions that go beyond self-driving.
High-bandwidth memory presents a significant business opportunity for these Korean rivals. The market is expected to be worth $33 billion by 2027 and as two of the leading memory suppliers, Samsung and SK Hynix stand to benefit immensely from the AI boom.
Winning the order from Tesla, likely worth billions of dollars, will enable Samsung to turn the tide in the HBM market and claw back the lead that SK Hynix has established. An order of this magnitude will likely require sign-off from Tesla CEO Elon Musk, who met with Samsung Electronics Executive Chairman Jay Y. Lee as recently as last year to discuss chips for cars.
Tesla and Samsung also have an established business relationship, with the Korean conglomerate reportedly bagging an order worth nearly half a billion dollars to supply camera modules for the Tesla Cybertruck. Samsung would certainly leverage all the tools at its disposal to ensure that it wins the HBM4 orders from Tesla.
