Background on Key Players
Samsung Electronics and SK Hynix, two leading South Korean chip manufacturers, have signed letters of intent to supply memory chips for OpenAI’s data centers. This partnership comes as these manufacturers collaborate with OpenAI, the developer of ChatGPT, to meet the growing demand for their Stargate project.
Project Overview and Funding
Former U.S. President Donald Trump announced the $500 billion Stargate project in January, tasking OpenAI and partners like SoftBank and Oracle to ensure the U.S. remains a leader in artificial intelligence (AI). Expanding chip availability is central to the project, with Nvidia investing up to $100 billion in OpenAI and supplying chips for data centers.
Expected Demand
According to South Korea’s presidential office, OpenAI’s demand for chips for the Stargate project is expected to reach approximately 900,000 dies per month. OpenAI aims to source most of these chips from Samsung and SK Hynix, though a specific delivery schedule has yet to be determined.
Market Position
Samsung and SK Hynix together hold around 70% of the global market for dynamic random-access memory (DRAM) and nearly 80% of the high-bandwidth memory (HBM) market. HBM, a standard DRAM type first produced in 2013, involves stacking chips vertically to save space and reduce energy consumption, aiding in processing large data volumes generated by complex AI applications.
OpenAI’s Expansion in South Korea
This year, OpenAI opened its first Seoul office due to rising demand for its ChatGPT service in South Korea. The country has the second-largest number of ChatGPT paying subscribers after the U.S., according to OpenAI.
Key Questions and Answers
- Who are the key players involved? Samsung Electronics, SK Hynix, and OpenAI are central to this partnership.
- What is the Stargate project? A $500 billion AI initiative announced by former U.S. President Donald Trump to ensure the U.S. remains a leader in artificial intelligence.
- Why are Samsung and SK Hynix important in this context? These South Korean chip manufacturers hold a significant portion of the global DRAM and HBM markets, making them crucial suppliers for OpenAI’s Stargate project.
- What is high-bandwidth memory (HBM)? A type of DRAM first produced in 2013, HBM stacks chips vertically to save space and reduce energy consumption, facilitating the processing of large data volumes generated by AI applications.
- Why is OpenAI expanding in South Korea? Due to increasing demand for its ChatGPT service, OpenAI opened its first Seoul office, making South Korea the second-largest market for ChatGPT paying subscribers.
