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Samsung snatches a $752 million AI chip order away from NVIDIA

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Last updated: March 22nd, 2024 at 09:05 UTC+01:00

Some details about Mach-1, Samsung's first in-house AI accelerator chip, emerged earlier this week. Samsung's aim with this product is to break NVIDIA's grip on the AI accelerator market and establish itself as one of the dominant players in this segment.

It seems that at least one company has been convinced by what Samsung is working on, and has decided to lock in its Ai accelerators orders for the Mach-1, which would have otherwise gone to NVIDIA. The potential value of this deal is estimated to be $752 million.

Samsung's Mach-1 is superior to NVIDIA's AI accelerator

Samsung will reportedly be supplying the Mach-1 AI accelerator chip to Korean internet giant Naver Corp. by the end of this year, in a deal worth up to $752 million. This deal also helps Naver reduce its reliance on NVIDIA for AI chips.

Dual-sourcing is a common practice in the semiconductor markets. No company wants to be overly reliant on just one supplier due to availability and pricing concerns. That's why Samsung balances the high-end Qualcomm chipsets for its mobile devices with the Exynos, and why Naver is looking beyond NVIDIA for AI accelerators.

People familiar with the matter reveal that Samsung and Naver are in final talks to decide on the exact volume and prices. Samsung is reportedly looking to price the Mach-1 chip at around $3,756 a piece with Naver looking to source between 150,000 to 200,000 units.

This Naver deal may also end up opening more doors for Samsung. The company is looking to win over some major US companies as well, including Microsoft and Meta, which are already in talks with Samsung for the AI accelerator.

Leveraging its sale of Mach-1 chips to Naver as a stepping stone, Samsung plans to expand its client base to Big Tech firms. Samsung is already in supply talks with Microsoft Corp. and Meta Platforms Inc. and the US firms showed interest, sources said.

The Mach-1 has some distinct benefits compared to NVIDIA's AI accelerator that's made up of GBUs and HBM chips. The Mach-1 uses Samsung's proprietary processors and low-power DRAM chips, boasting fewer data bottlenecks compared to the NVIDIA chip while also being more power efficient. Samsung's AI accelerator is reportedly one-tenth of the price of NVIDIA's chip.

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