Nvidia might have finally approved Samsung's 12-layer HBM3E chips

Samsung is widely known for its phones and TVs, but a large part of its revenue comes from memory chips. It was the world's biggest memory chip supplier for decades but recently fell behind its rivals due to its inability to supply fifth-generation high-bandwidth memory (HBM3E) chips to Nvidia, leading to huge losses in the semiconductor chips division.

The South Korean firm might have finally received a go-ahead from Nvidia, though.

According to a recent report from AlphaBiz Korea, Nvidia recently agreed to buy 12-layer HBM3E chips from Samsung Electronics. Soon, the company will reportedly supply 30,000 to 50,000 units of its new chips to Nvidia, the world's biggest and most important AI chip firm right now.

Samsung's 12-layer HBM3E memory chips will reportedly be used only in water-cooled servers, suggesting that the company hasn't fully resolved heat-related issues in its chips. Samsung declined to comment on this report.

The recent boom in the AI sector has sparked a competition among major tech companies like Amazon, Apple, Google, Meta, Microsoft, and OpenAI. These companies are racing to establish huge AI server farms using AI accelerators from AMD, Nvidia, and other brands. A crucial component of these accelerators is the HBM chip, which feature stacked DRAM chips. Micron, Samsung, and SK Hynix are the only brands in the world that make HBM chips.

While Samsung launched HBM3E chips last year, they didn't meet Nvidia's quality standards due to issues related to heat generation. Even after reworking its HBM3E chips, Samsung didn't get Nvidia's approval. A few months ago, it received approval from Nvidia for its 8-layer HBM3E chips, but they were approved only for the Chinese market where Nvidia sells its lower-end H20 AI accelerator.

Now that Samsung seems to have received Nvidia's approval for 12-layer HBM3E chips, the South Korean firm might soon rake in billions of dollars in revenue and profit. It recently also received large chip manufacturing orders from Apple and Tesla. All these things would help Samsung get back in shape.