China racing to stockpile AI-powering HBM chips

Chinese technology firms started stockpiling Samsung’s high-bandwidth memory (HBM) chips earlier this year in anticipation that the United States would soon ban their export to China.

China accounted for about 30% of Samsung’s HBM chip revenues in the first half of this year, driven by rising demand from tech giants like Huawei and Baidu as well as new Chinese startups, Reuters reported, citing three unnamed sources. HBM chips are commonly used as artificial intelligence (AI) accelerators.

The Reuters report said most Chinese firms have sought in particular the HBM2E chip, which is one generation behind the HBM3 and two generations behind the most advanced HBM3E. China plans to produce indigenously the HBM2, the most mature, least advanced model.

Global HBM market revenue could rise to US$14 billion in 2024 from $2.7 billion in 2022, Yole Group, a France-based research institute, said in a report in February 2024. The figure is expected to rise to $37.7 billion in 2029, representing a compound annual growth rate of 38% from 2023 to 2029.

Yole also said that the percentage of HBM to overall DRAM market revenue will increase from 3% in 2022 to 19% this year.

Meanwhile, analysts at Fangzheng Securities expected that global HBM demand will only reach $9.14 billion, or 40 million units, in 2024.

They said Nvidia will consume 58% of all HBM chips, followed by Google (15%), AMD (14%) and Chinese firms (7%). The remaining 6% will be used by other technology companies, the report said.

Taiwan’s DigiTimes said Thursday (August 8) that Chinese firms’ stockpiling of Samsung’s HBM chips has driven growth in China’s overall chip imports in the first seven months of 2024.

However, Li Yali, a columnist at Guancha.cn, said in an