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In a strategic move aimed at reducing its dependency on Nvidia’s high-cost AI chips, Naver, often dubbed the South Korean equivalent of Google, has inked a significant 1 trillion won ($750 million) agreement with Samsung.
Under the terms of the deal, Samsung will supply its more cost-effective Mach-1 chips to Naver by the conclusion of 2024. The Mach-1 chip, presently in development, serves as an AI accelerator in the form of a System-on-Chip (SoC), merging Samsung’s proprietary processors with low-power DRAM chips. This integration aims to alleviate the bottleneck between the GPU and HBM (High Bandwidth Memory), offering enhanced performance and cost-efficiency.
The revelation of the Mach-1 chip occurred during Samsung’s 55th regular shareholders’ meeting, where Kye Hyun Kyung, CEO of Samsung Semiconductor, confirmed the chip’s technological validation on Field-Programmable Gate Arrays (FPGAs) and highlighted the ongoing finalization of the SoC design.
While the exact volume and pricing of the Mach-1 chips remain subjects of negotiation, reports from The Korea Economic Daily suggest that Samsung is targeting a price of approximately $3,756 per chip. Initial orders are anticipated to range between 150,000 and 200,000 units.
Naver intends to leverage Samsung’s Mach-1 chips to bolster the performance of servers powering its AI map service, Naver Place. Should the initial batch meet expectations, Naver plans to expand its procurement of Mach-1 chips.
Samsung views the collaboration with Naver as just the beginning, as it is reportedly engaged in supply discussions with tech giants like Microsoft and Meta Platforms. These companies, akin to Naver, are actively seeking alternatives to Nvidia’s AI hardware.
Additionally, Samsung’s agreement with Naver is positioned to intensify its competition with its South Korean counterpart, SK Hynix, a dominant force in the advanced High Bandwidth Memory (HBM) segment. Samsung’s recent heavy investments in HBM technology culminated in the unveiling of the industry’s first 12-stack HBM3E 12H DRAM at the beginning of March. This innovation, slated to commence shipping in the second quarter of this year, is anticipated to outperform Micron’s 24GB 8H HBM3E in terms of capacity and bandwidth, further strengthening Samsung’s position in the market.