admin Chinese tech giants like Huawei are stockpiling high-bandwidth memory (HBM) chips from Samsung. These chips are crucial for artificial intelligence (AI) and other advanced technologies. The rush to secure HBM chips comes as the U.S. plans to impose new export restrictions on semiconductors to China. The potential restrictions have created urgency among Chinese companies to ensure a steady supply of these critical components.
Chinese companies have increased their purchases of Samsung’s HBM chips since the beginning of the year. This surge in demand has made China a significant market for Samsung, accounting for nearly 30% of its HBM chip revenue in the first half of 2024. The looming U.S. export control package is expected to include new restrictions on HBM chip sales, though the specifics remain unclear.
As China strives to keep its technological ambitions on track, securing access to advanced chips is essential. However, the global semiconductor supply chain is under strain. The U.S. government, citing national security concerns, aims to limit China’s access to high-end semiconductors.
HBM chips are pivotal for creating advanced processors like graphics processing units (GPUs) used in generative AI. Only three major manufacturers produce these chips: Samsung, SK Hynix, and Micron Technology. Chinese demand has primarily focused on the HBM2E model, which is two generations behind the most advanced HBM3E chips. Despite this, the supply of these advanced chips is already tight due to global demand driven by the AI boom.
With domestic technology development not fully mature, Chinese firms are increasingly reliant on Samsung’s HBM chips. Other manufacturers’ capacities are already committed to American AI companies, leaving limited options for China. Therefore, securing these chips has become crucial for various Chinese businesses, from satellite manufacturers to tech giants.
While Chinese firms are making progress in developing HBM2 chips, they still lag behind the latest technology. The new U.S. rules could further hamper these efforts. Restrictions on HBM sales to China might have a more significant impact on Samsung than on its competitors, who rely less on the Chinese market.
In response to rising demand, SK Hynix is adjusting its production to focus on HBM3E output, with its chips nearly sold out through 2025. Micron, however, has refrained from selling its HBM products to China since last year, further limiting China’s options.
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