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Samsung Electronics has replaced its semiconductor chief in an effort to overcome what it has described as a “chip crisis”, amid growing concern that the world’s largest memory-chip maker by sales is falling behind rivals in the booming artificial intelligence segment.
The South Korean company appointed Jun Young-hyun to head its core semiconductor business, replacing Kyung Kye-hyun, who will now lead Samsung’s “future business” division looking at different technologies. Jun previously led the group’s battery unit, Samsung SDI, and earlier worked in memory chip development.
The move comes as Samsung is trying to catch up with rivals in high-bandwidth memory (HBM) chips used in artificial intelligence, following criticism that it is trailing domestic rival SK Hynix in mass-producing the most advanced HBM chips.
“This is a pre-emptive measure to strengthen future competitiveness by renewing the atmosphere internally and externally,” Samsung said on Tuesday, adding that Jun’s knowhow would help it overcome the “chip crisis”.
Analysts said the mid-year shake-up was out of the ordinary. Samsung usually changes its top executives at the end of the year. “It shows its sense of crisis or how desperate it is, as it is lagging behind its rivals in cutting-edge products like HBM and DDR5 [memory],” said an analyst at a foreign brokerage who did not wish to be named.
SK Hynix shares have surged by more than a third this year, while Samsung shares are little changed despite a strong recovery in memory chip prices. Samsung is also struggling to catch up with bigger rival TSMC in the foundry business of contract-manufacturing chips.
SK Hynix is currently the exclusive supplier of HBM3E chips for Nvidia’s graphics processing units needed for training AI. In March, Nvidia chief Jensen Huang said his company was in the process of qualifying Samsung’s new HBM chips for its GPUs.
Samsung is optimistic about AI demand in the second half and plans to triple HBM supply this year. It recently began mass production of its latest HBM product, eight-layer HBM3E chips, and plans to mass produce 12-layer HBM chips by the end of June — a quarter earlier than SK Hynix.
Kwon Jae-soon, the head of yield at SK Hynix, told the Financial Times that it had been able to reduce the time needed to bring into production its HBM3E chips by 50 per cent. A target yield rate of 80 per cent of chips being made without imperfections had almost been reached for the latest HBM chips, he added.
The chipmaker’s HBM production capacity is almost fully booked through next year. SK Hynix plans to mass produce more advanced HBM4 chips in collaboration with TSMC in 2025, a year earlier than Samsung.
“Our main focus this year is on producing eight-layer HBM3Es because that’s what customers want most,” said Kwon. “Boosting yields is getting more important to stay ahead in this AI era.”
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