AI opportunities and challenges drive unprecedented push for collaboration

TAIPEI — Leading memory chip makers Samsung and SK Hynix are seeking closer collaboration with Taiwan’s tech industry amid a global rush to capitalize on demand from the artificial intelligence computing boom.

The two South Korean giants hinted they would like to work more closely with companies like Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, as the industry looks to tackle technological challenges including the intense energy demands of AI.

Jung-Bae Lee, president and general manager of the memory business in Samsung Electronics’ Device Solutions Division, said the company is open to working with contract chipmakers beyond Samsung itself, suggesting more collaborations with external players like TSMC.

“It is also worth noting that Samsung is working towards offering foundry flexibility for our customers, meaning memory collaboration is not limited solely to Samsung. We are at a pivotal moment where component collaboration is more important than ever,” Lee said at a CEO summit at the Semicon Taiwan trade fair on Wednesday.

Jung-Bae Lee, head of Samsung Electronics’ memory business, gives a keynote speech during Semicon Taiwan in Taipei on Sep 4. (Photo by Shinya Sawai)

Justin Kim, president of SK Hynix, said he has visited Taiwan 10 times this year, more often than any other destination, because of the importance of the island’s semiconductor ecosystem. In April, the company signed a memorandum of understanding with TSMC to jointly develop next-generation high-bandwidth memory (HBM) chips, a key AI component. TSMC is a critical supplier of Nvidia and Advanced Micro Devices’ AI accelerator chips.

SH Hynix, Samsung and Micron of the U.S. are the top three suppliers of HBM chips. TSMC’s advanced chip packaging technology links HBM chips with AI processors or graphic processors to allow them to work more efficiently.

Y.J. Mii, executive vice president and co-COO of TSMC, said AI is a huge business opportunity and forecast an annual growth of 50% or more.

“We are not only seeing just generative AI or ChatGPT … That’s just one type of AI,” Mii said, adding that there are also opportunities in improving productivity in many areas. “From an AI accelerator point of view, for the next couple of years, at least 50% of compound annual growth rate is achievable.”

President of SK Hynix Justin Kim said close collaboration between South Korea and Taiwan is critical for the chipmaking industry, in keynote speech at Semicon Taiwan in Taipei on Sept. 4. (Photo by Shinya Sawai)

The comments at Semicon Taiwan mark a rare instance of South Korean and Taiwanese players looking to forge closer collaborations. This is the first time that both SK Hynix and Samsung executives are participating in the event, one of the most important semiconductor trade fairs in the world.

In the past, the semiconductor industry saw more competition than collaboration between South Korea and Taiwan, the world’s two largest chip economies after the U.S. by revenue. South Korean chipmakers in particular have traditionally focused on building fully integrated internal ecosystems. The advent of the AI era, however, has made it more important for suppliers to work together across geographical and corporate boundaries to address technological bottlenecks in both memory and logic chips.

“AI infrastructure meets challenges … close collaboration between these two [South Korea and Taiwan] is very critical,” Kim of SK Hynix said during his keynote speech. “This is not only because it’s good for our interests, but also because we need to work together to solve any challenges ahead of us.”

https://asia.nikkei.com/Business/Tech/Semiconductors/SK-Hynix-and-Samsung-seek-closer-ties-with-Taiwan-s-supply-chain2