Asia Tech Wire (Mar 22) -- Samsung Electronics, the world's top memory chip maker, will supply its next-generation artificial intelligence chip, Mach-1, to South Korea's online giant Naver Corp. by the end of this year, per a new report from KED Global.

The order, worth 1 trillion won ($752 million), will allow Naver to significantly reduce its reliance on Nvidia's AI chips, the report noted.

The two companies are in final negotiations to fine-tune the exact volume and pricing for the supply deal, people familiar with the matter said.

Samsung hopes to price the Mach-1 chip at around 5 million won ($3,756) apiece, while Naver wants to get 150,000 to 200,000 units.

Naver is expected to use Mach-1 chips in its servers for AI inference, replacing such chips it has bought from U.S. tech giant Nvidia, the report said.

In addition to Naver, Samsung has been in supply talks with Microsoft Corp. and Meta Platforms Inc., which have shown interest, sources said.

The Mach-1 chip is an application-specific integrated circuit (ASIC) design featuring LPDDR memory, which can dramatically reduce memory bandwidth requirements during inference, making it suitable for edge computing applications.

Unlike Nvidia' AI accelerator, which consists of GPUs and HBM chips, the Mach-1 chip combines Samsung's proprietary processors with low-power (LP) DRAM chips.

However, another foreign Korean media outlet reported that the upcoming Mach-1 may compete with AI chips from Nvidia, AMD and others, but Samsung does not intend to rival Nvidia's ultra-high-end AI solutions such as the H100, B100 or B200 with the chip.

Kye-Hyun Kyung, head of Samsung's semiconductor business, said at the company's general meeting on Wednesday that the Mach-1 chip is under development.

Mach-1 will be ready by the end of the year and the chip-powered artificial intelligence system will be officially launched early next year, Kyung assured.