Samsung wrapping up HBM2E production as the China threat looms

Chinese memory makers have become a major concern for Samsung. Their technology is advancing rapidly and they've begun to given Samsung a tough time in legacy memory products like DDR4. China is also focusing on high-bandwidth memory chips which are crucial for AI applications.

Samsung is reportedly wrapping up the production of its HBM2E memory chips as it anticipates a low-cost offensive from Chinese rivals, much in the same way they've done with technologies like DDR4.

China's memory makers have been aggressively undercutting Samsung on price. It's believed that Chinese firms have been offering their DDR4 products at nearly half the price of what Samsung charges. This may be one of the reasons why Samsung is going to end DDR4 production.

A similar onslaught is also expected for high-bandwidth memory as China's CXMT is expected to enter the HBM2E market in the near future. It's most likely going to undercut Samsung on price, making it hard for the company to compete just based off of the quality of its product alone.

Thus the decision has reportedly been made to wind down production on HBM2E chips and use that production capacity for newer HBM3E and HBM4 chips. Freeing up engineers working on this would also mean that the company gets additional resources that it can then deploy to secure a competitive edge in the HBM4 market.

The next-generation HBM4 chips are crucial for Samsung to regain the edge that it has lost to SK Hynix with HBM3E. This has already cost the company orders worth billions of dollars, so it needs all hands on deck to ensure that there's no repeat of this situation with HBM4 chips.