Samsung Electronics is preparing to begin manufacturing its next generation of high-bandwidth memory chips, HBM4, as early as next month, marking a significant step in its efforts to strengthen its position in the fast-growing artificial intelligence hardware market. According to a person familiar with the matter, initial supplies are expected to go to Nvidia, the dominant player in AI accelerators.

The move comes as Samsung works to close the gap with local rival SK Hynix, which has so far emerged as Nvidia’s main supplier of advanced memory used in AI data centers. Earlier supply delays in Samsung’s HBM business weighed on its earnings and share price, underscoring how critical the segment has become amid the global AI boom.

Investors appeared to welcome signs of progress. Samsung shares rose 2.2% in morning trading, while SK Hynix shares fell 2.9%, reflecting shifting expectations around future HBM orders. Details on the scale of Samsung’s planned shipments, however, remain unclear, as the source declined to specify volumes.

Neither company offered official confirmation. A Samsung spokesperson declined to comment, and Nvidia did not immediately respond to requests for comment.

Local media reports have added momentum to the story. South Korea’s Korea Economic Daily reported that Samsung has passed HBM4 qualification tests for both Nvidia and AMD and is set to begin shipments to Nvidia next month, citing industry sources. If confirmed, this would represent a meaningful breakthrough for Samsung in a segment where qualification timelines are long and customer standards are exacting.

SK Hynix, meanwhile, continues to press ahead with its own expansion plans. The company said in October that it had completed HBM supply talks with major customers for next year. An executive told Reuters earlier this month that SK Hynix plans to start deploying silicon wafers into a new fabrication facility, M15X, in Cheongju, South Korea, next month to produce HBM chips, though it remains unclear whether HBM4 will be included in the initial output.

More clarity may come soon. Both Samsung and SK Hynix are scheduled to report fourth-quarter earnings on Thursday, when they are expected to provide updates on HBM4 orders and production plans.

The stakes are high, as Nvidia prepares to roll out its next-generation “Vera Rubin” platform later this year. Nvidia CEO Jensen Huang said earlier this month that the new chips are already in full production and will be paired with HBM4 memory. As demand for AI computing power accelerates, the battle between Samsung and SK Hynix to secure a larger share of the HBM market is set to intensify further.