Samsung to use tech favoured by SK Hynix as AI chip making race heats up

SEOUL: Samsung Electronics plans to use a chip making technology championed by rival SK Hynix, five people said, as the world’s top memory chipmaker seeks to catch up in the race to produce high-end chips used to power artificial intelligence.

The demand for high bandwidth memory (HBM) chips has boomed with the growing popularity of generative AI. But Samsung, unlike peers SK Hynix and Micron Technology, has been conspicuous by its absence in any dealmaking with AI chip leader Nvidia to supply latest HBM chips.

One of the reasons Samsung has fallen behind is its decision to stick with chip making technology called non-conductive film (NCF) that causes some production issues, while Hynix switched to the mass reflow molded underfill (MR-MUF) method to address NCF’s weakness, according to analysts and industry watchers.

Samsung, however, has recently issued purchase orders for chipmaking equipment designed to handle MUF technique, three sources with direct knowledge of the matter said.

“Samsung had to do something to ramp up its HBM (production) yields ... adopting MUF technique is a little bit of swallow-your-pride type thing for Samsung, because it ended up following the technique first used by SK Hynix,” one of the sources said.

Samsung said its NCF technology is an “optimal solution” for HBM products and would be used in its new HBM3E chips. “We are carrying out our HBM3E product business as planned,” Samsung said in response to Reuters’ questions on the article.

After the article was published, Samsung issued a statement saying “rumours that Samsung will apply MR-MUF to its HBM production are not true”.

The HBM3 and HBM3E are the newest versions of high bandwidth memory chips that are bundled with core microprocessor chips to help process vast amounts of data in generative AI.

Samsung’s HBM3 chip production yields stand at about 10-20%, lagging SK Hynix that has secured about 60-70% yield rates for its HBM3 production, according to several analysts.

Samsung refuted the estimated production yields and said it had secured a “stable yield rate” without elaborating.

According to one of the sources, Samsung is already in talks with material manufacturers, including Japan’s Nagase, to source MUF materials.

But mass production of the high-end chips using MUF is unlikely to be ready until next year at the earliest, as Samsung needs to run more tests, the person added.

The three sources, mentioned above, said Samsung plans to use both NCF and MUF techniques for its latest HBM chip.