US embargo looms

Chinese companies hoard Samsung’s AI memory

A Samsung chip factory in South Korea, where flash memory for SSDs and RAM is produced

(Bild: Samsung)

According to insiders, Chinese companies are stocking up on Samsung's high-performance memory for artificial intelligence (AI) due to the threat of a US embargo. In the first half of the year, they bought up around 30 percent of the production of so-called HBM (High Bandwidth Memory) chips. 

The impact of an export ban on the South Korean company would be correspondingly high. Samsung is the supplier of choice for Chinese customers because the company has free capacity, explained industry expert Nori Chiou from asset manager White Oak. The production of rivals SK Hynix and Micron has been outsourced to Western AI companies for many months.

HBM memory chips can store and retrieve large amounts of data in a particularly short time. Hynix and Micron are currently the technological leaders in the current "HBM3E" generation. Chinese customers are stocking up on the previous "HBM2E" generation from Samsung, the insiders added. Huawei, for example, uses these memories to build its self-developed AI special processors "Ascend AI". Other customers include the Chinese technology groups Baidu, Tencent and Haawking. None of these companies could initially be reached for comment. The same applied to the US company Micron. Samsung and SK Hynix did not want to comment on this topic.

In order to slow down the technological and military rise of the People's Republic, the US government wants to further restrict the export of high technology, according to a media report. Among other things, access to HBM memories is to be made more difficult for China. However, the details of the possible US order and the potential impact on Chinese companies initially remained unclear. Although Huawei and the memory chip specialist CXMT are working on their own HBM memories, they are still several generations behind in terms of technology.