Investing.com – Shares of memory chip maker Samsung Electronics fell on Friday after Reuters reported that the company’s latest high-bandwidth memory (HBM) chips had not yet been tested by Nvidia for use in artificial intelligence processors.
Samsung Electronics Co Ltd. (KS:) fell 2.3% to 76,500 won, a one-month low. Losses in stocks sent South Korea’s benchmark index down nearly 1%.
Reuters reported that Samsung’s HBM and HBM3E chips, which are the company’s most advanced chips designed for use in artificial intelligence processors, still fail to meet NVIDIA Corporation (NASDAQ:) standards due to heating and power consumption issues.
The report shows a potential delay in Samsung’s ambitions to capitalize on demand from the fast-growing artificial intelligence industry and could see the company fall behind rivals. SK Hyniks Inc. (KS:), which is currently the only supplier of advanced HBM3E chips on the market.
Meeting Nvidia’s requirements has become paramount for contract chipmakers such as Samsung, given that the US firm controls more than 80% of the market for advanced artificial intelligence processors. Nvidia also currently produces the most advanced AI processors available on the market.
US rival Micron Technology Inc (NASDAQ:) also recently said it would start producing advanced HBM chips, demand for which is expected to skyrocket as artificial intelligence advances.
Samsung is the world’s largest memory chip manufacturer by volume. While the company has indeed benefited from increased demand for AI in recent quarters, that trend could change if it loses market share in the advanced HBM sector to rivals like Micron and SK Hynix.