NVIDIA's Missed Opportunity: Samsung's 2018 Rejection of Strategic Partnership Reshapes AI Chip Landscape

NVIDIA CEO met with Samsung in 2018 to propose jointly-developed HBM, foundry switch from TSMC

TL;DR: In 2018, NVIDIA CEO Jensen Huang proposed a strategic partnership with Samsung Electronics to co-develop HBM, advance foundry technology beyond 8nm, and expand CUDA software. Samsung rejected these proposals amid internal challenges, leading NVIDIA to partner with SK hynix, which now dominates HBM supply for AI GPUs. NVIDIA CEO Jensen Huang reportedly secretly met with Samsung Electronics back in 2018 to discuss co-development of HBM, a possible switch from TSMC to Samsung Foundry, and to work together closely on CUDA. According to a semiconductor industry source, CEO Jensen Huang secretly visited Samsung Electronics in 2018 and made three proposals. The first was to expand the HBM development that Samsung and NVIDIA were jointly pursuing to a higher level. The second was to jointly develop foundry technology beyond 8nm. The third involved jointly fostering NVIDIA's software ecosystem, CUDA. The source, who requested anonymity, stated: "at the time, Samsung rejected all three of CEO Jensen Huang's proposals". They added that "CEO Jensen Huang lamented, 'There is no one at Samsung to discuss long-term strategy with me'". At the time, Jensen wasn't able to meet with Samsung Electronics Chairman Lee Jae-yong. Samsung as a whole was significantly subdued due to the prosecution's investigation and trial against Chairman Lee, which had fully commenced in 2027, and that it's understood long-term decision-making "wasn't smooth". Once the NVIDIA partnership with Samsung fell through, the company approached SK hynix with the two companies forming a partnership in HBM development, which has seen SK hynix's rise to HBM fame over the years as NVIDIA has dominated the AI GPU market. SK hynix is now expected to reach record-high performance by supplying HBM3E memory to NVIDIA. The industry source expressed regret, adding: "if Samsung Foundry had partnered with NVIDIA at that time, there wouldn't be the current monopolistic situation where TSMC takes all of NVIDIA's volume".

Samsung shot itself in the foot in 2018 when it turned down NVIDIA's Jensen Huang

TL;DR: In 2018, Samsung declined NVIDIA's offer for a long-term HBM development partnership, missing a key opportunity in the growing AI and GPU market. This decision contributed to Samsung's struggling semiconductor and HBM businesses, while competitor SK Hynix capitalized on the collaboration to become a leading HBM supplier. Samsung was approached by NVIDIA's CEO Jensen Huang in 2018 to enter into a long-term collaboration, but the Korean tech giant turned Huang down in what might be one of its most regrettable decisions in recent memory. A new report by Korean media has revealed that Samsung turned down an offer by Huang for a long-term collaboration on joint HBM development, which included a partnership with the foundry business and work on the CUDA ecosystem together. Fast forward to today, Samsung's semiconductor and HBM businesses aren't looking very healthy at all, with reports saying that both are operating at a loss and are unable to maintain healthy yields or pick up on market trends. The report states that NVIDIA had the forward-thinking to know that HBM development was going to be integral for the future and approached Samsung to be its supplier due to how prominent the company is in the DRAM and NAND chip spaces. At the time, Samsung was leading in both of those areas, hence Huang's decision to approach them with an offer. However, Samsung leadership reportedly rejected the offer from NVIDIA as no one at the company was ready for a long-term partnership at the level that NVIDIA was requesting. Unfortunately for Samsung, it was unaware that NVIDIA was about to balloon into a now $4 trillion company through the explosion of artificial intelligence software that requires GPU horsepower to function. With Samsung off the table, NVIDIA approached SK Hynix, a direct competitor to Samsung, for an HBM partnership, which the company accepted and has maintained until today. Now, SK Hynix is making its way to the top of the food chain when it comes to supplying HBM and memory products.

NVIDIA CEO Jensen Huang Reportedly Approached Samsung Back in 2018 to Collaborate on HBM, Chip Processes, and CUDA -- But Was Flatly Rejected

Samsung might have made many mistakes in the past, but turning down NVIDIA's CEO for a potential long-term collaboration might be one of the more "fatal" ones for business. The Korean giant isn't in the best financial position right now. Its semiconductor and HBM businesses are reporting operating losses, mainly because the firm has been unable to capitalize on market trends. While this situation has been brewing for several years now, according to a report by Korean media, Samsung had actually managed to turn down a massive offer by NVIDIA's CEO for a long-term collaboration, which included joint HBM development, partnership with the foundry business, and work on the CUDA ecosystem together. The decision has indeed costed them billions of dollars if not more. The report claims that NVIDIA knew how important HBM would be in the future, which is why the firm approached the Korean suppliers for development, given that they were famous for DRAM and NAND chips. Since Samsung was the top-tier firm then, Jensen approached them initially, but the leadership rejected his proposals, mainly due to their unoptimistic approach towards HBM. Jensen claims that no one at Samsung was ready for a long-term collaboration with NVIDIA, but if they had known that Team Green would later evolve to be a $4 trillion entity, the Korean giant wouldn't have hesitated. What happened instead is that NVIDIA approached SK hynix for joint HBM collaboration, and the two of them formed a partnership that is still ongoing. SK Hynix is evolving to be the largest supplier for HBM and memory products, throwing away the decades-long dominance of Samsung over the segment. SK Hynix is the primary supplier for HBM3, HBM3E, and potentially HBM4 for NVIDIA right now, and the firm has reported massive revenue figures over the past few quarters, mainly due to their extensive collaboration with NVIDIA. Given that Samsung would've agreed to the partnership at that time, they wouldn't be lagging in the HBM and the chip sector, and more importantly, Korean competitors wouldn't have the chance to get ahead of Samsung. The report claims that the chip markets, which TSMC currently monopolizes, would be much more centralized with Samsung's products if the Korean giant agreed to Jensen's proposals, but it was a massive mistake by the administration of that time. Individuals have made many mistakes predicting NVIDIA's future, and another one was from SoftBank's CEO Masayoshi Son. A few years prior to the AI frenzy, Son sold a massive stake in Team Green that cost him hundreds of billions in stock value. Predicting Team Green and Jensen's speed isn't for everyone, and similarly, no one is certain about how quickly NVIDIA can open up an entirely new frontier in the AI hype.