Korean Firms Virtually Monopolize HBM for 'H200'... Positive Outlook for Samsung and SK

Possibility of Easing US Export Controls to China
Korean Semiconductor Industry Expected to Improve
Nvidia Held 95% Market Share in China Before Restrictions

As the possibility of supplying Nvidia's next-generation artificial intelligence (AI) accelerator, the H200, to China opens up, there are expectations that the Korean memory industry will benefit. Since Korean companies effectively have a monopoly on the production of high bandwidth memory (HBM) used in the H200, analysts believe Korea's influence in the HBM-centered global supply chain will become even stronger.

According to the semiconductor industry on December 9, Nvidia's H200 adopts HBM3E, which offers significantly increased memory capacity and bandwidth compared to the previous generation, and Korean companies are leading the design and mass production of this HBM. Currently, SK hynix dominates the global HBM market with the highest market share, followed by Micron and Samsung Electronics. Both SK hynix and Samsung Electronics have experience in mass-producing HBM3E and are accelerating the development of next-generation HBM4. Since Chinese semiconductor companies have not yet acquired the capability for mass production of HBM, if Chinese companies introduce US-made accelerators, their dependence on Korean HBM is expected to increase further.

The domestic semiconductor industry also anticipates that the supply volumes previously restricted by US export controls to China may be released. Nvidia suffered significant losses due to US export restrictions to China. According to Jensen Huang, CEO of Nvidia, approximately $15 billion in potential revenue evaporated, and inventory-related costs for the H20 amounted to losses of $4.5 billion to $5.5 billion. Nvidia's market share in China, which was as high as 95% before the regulations, reportedly dropped to nearly 0% at one point.

The halt in Nvidia's supply of accelerators to China also affected the supply flow of domestic companies. Because HBM is packaged as an integrated unit, the production calendars of memory companies and backend partners have been directly linked to Nvidia's order volumes. The export ban on the Nvidia H20 affected about 8 million HBM units, resulting in an estimated export loss of approximately $1.6 billion for Korean companies. Since the H100 and H200 are already completely banned from export to China, the total HBM export losses for domestic companies far exceed $1.6 billion when these are included.

The domestic semiconductor industry is welcoming the possibility that some of the supply volumes previously restricted by US export controls to China may now be resolved. An industry insider said, "If the restrictions are lifted, the situation will improve for Korean companies supplying HBM chips. However, for now, there is a sense of uncertainty, and companies are watching the situation until the restrictions are fully resolved." Kim Yongseok, Distinguished Professor at Gachon University’s College of Semiconductor, also commented, "This is a positive development, especially for Korean companies like Samsung Electronics that have supplied many chips to China. The volumes that had been reduced due to export controls to China are expected to increase further."