Earlier this week, some details about Samsung's first in-house AI accelerator chip, Mach-1, were revealed. Samsung's objective with this product is to disrupt NVIDIA's dominance in the AI accelerator market and establish itself as a key player in this segment.
It appears that at least one company has been persuaded by Samsung's developments and has chosen to secure its AI accelerator orders for the Mach-1, which would have otherwise been placed with NVIDIA. The potential value of this deal is estimated to be $752 million.
Samsung's Mach-1 outperforms NVIDIA's AI accelerator. Samsung is expected to supply the Mach-1 AI accelerator chip to Korean internet giant Naver Corp. by the end of this year, in a deal worth up to $752 million. This agreement also helps Naver reduce its dependence on NVIDIA for AI chips.
Dual-sourcing is a common practice in semiconductor markets as no company wants to overly rely on just one supplier due to availability and pricing concerns. This is why Samsung balances high-end Qualcomm chipsets for its mobile devices with the Exynos, and why Naver is exploring alternatives to NVIDIA for AI accelerators.
Sources familiar with the matter reveal that Samsung and Naver are in advanced discussions to determine the exact volume and prices. Samsung is reportedly aiming to price the Mach-1 chip at around $3,756 each, with Naver looking to source between 150,000 to 200,000 units.
This Naver deal could potentially lead to more opportunities for Samsung. The company is seeking to attract major US companies, including Microsoft and Meta, both of which are already engaged in discussions with Samsung regarding the AI accelerator.
By leveraging the sale of Mach-1 chips to Naver as a strategic move, Samsung plans to expand its client base to include Big Tech firms. Samsung is already in supply discussions with Microsoft Corp. and Meta Platforms Inc., and sources indicate that these US firms have shown interest.
The Mach-1 offers several distinct advantages compared to NVIDIA's AI accelerator, which consists of GBUs and HBM chips. The Mach-1 utilizes Samsung's proprietary processors and low-power DRAM chips, resulting in fewer data bottlenecks compared to the NVIDIA chip while also being more power-efficient. Samsung's AI accelerator is reportedly priced at one-tenth of the cost of NVIDIA's chip.
