Samsung Electronics Chairman Lee Jae-yong recently made a high-profile visit to China, meeting with leading Chinese automaker executives and President Xi Jinping. South Korean analysts suggest the trip was more than diplomatic optics—it reflects Samsung's bid to capitalize on China's surging artificial intelligence (AI) demand and revive its faltering semiconductor division.
Samsung's HBM3 tapped for China-only Nvidia H20 AI chip
Samsung's fourth-generation high bandwidth memory (HBM3) is seeing a spike in shipments, driven by its integration in Nvidia's H20 chip—an AI processor tailored for China to sidestep US export controls.
South Korean media, including Business Post, Chosun Biz, and Nate, reported surging demand for Nvidia's H20, with shortages emerging as Chinese buyers snap up supplies. Samsung, seen as the primary HBM3 supplier for the chip, is benefiting directly from the boom.
Developed to sidestep US export sanctions, Nvidia's H20 has become a must-have as China's AI sector surges—spurred by new models like DeepSeek. Tech giants such as Tencent, Alibaba, and ByteDance are reportedly buying H20 units in bulk to scale up AI infrastructure. Insiders say Tencent has nearly exhausted H20 chip inventory, fueling shortages.
Samsung, supplying HBM3 for H20 since July 2024, is riding the demand wave. Meanwhile, SK Hynix is prioritizing production of the next-gen HBM3E and pulling back on older HBM lines.
SK hynix is expected to have HBM3E comprise 89% of its HBM production by 2025. In contrast, Micron continues to trail both South Korean firms in manufacturing capacity.
Samsung is projected to begin supplying HBM3E to Nvidia in the second quarter of 2025, pending certification, positioning it for another potential boost in memory chip revenue.
Lee meets Xiaomi, BYD to drive automotive memory sales
Lee is also targeting growth in China's electric vehicle (EV) sector, making in-person visits to Xiaomi and BYD to explore opportunities in automotive memory supply.
During his trip, Lee attended the China Development Forum (CDF) in Beijing, toured Xiaomi's EV factory with Qualcomm CEO Cristiano Amon, and met with Xiaomi Chairman Lei Jun and Vice Chairman Lin Bin.
Lee then traveled to Shenzhen to meet BYD Chairman Wang Chuanfu at BYD's headquarters. He returned to Beijing on March 28 to join a business roundtable led by President Xi, alongside other top executives.
Industry sources suggest Samsung is in talks with firms like Xiaomi on automotive memory deals. Already collaborating with Qualcomm on vehicle semiconductors, Samsung is viewed as a strong contender in the auto memory market.
China may hold the key to Samsung's recovery. Its 2024 business report shows China revenue surged 54% year-over-year to KRW64.9 trillion (approx. US$44.2 billion), with analysts estimating that memory chips accounted for roughly 60% of that figure.
Article edited by Jack Wu
