SEOUL, South Korea: Samsung Electronics is preparing to begin production of its next-generation high-bandwidth memory chips as early as next month, in a move that would mark a key step in its efforts to supply Nvidia and narrow the gap with rival SK Hynix, a person familiar with the matter said.

The South Korean tech giant plans to start manufacturing HBM4 chips in February and supply them to Nvidia, the source told Reuters on January 27. The person declined to provide details on the volume of chips expected to be delivered.

Samsung has been working to regain momentum in advanced memory after losing ground to cross-town competitor SK Hynix, the leading supplier of high-end memory chips used in Nvidia's artificial intelligence accelerators. Supply delays last year weighed on Samsung's earnings and share price.

Samsung shares rose 2.2 percent in morning trade, while SK Hynix shares fell 2.9 percent.

A Samsung spokesperson declined to comment, and Nvidia was not immediately available for comment.

South Korean newspaper Korea Economic Daily reported that Samsung had passed HBM4 qualification tests for Nvidia and AMD, and would begin shipping HBM4 chips to Nvidia next month, citing chip industry sources.

SK Hynix said in October it had completed HBM supply talks with major customers for next year. Earlier this month, a company executive told Reuters that SK Hynix plans to begin deploying silicon wafers into its new M15X fabrication plant in Cheongju, South Korea, next month to produce HBM chips, without specifying whether HBM4 would be included in the initial output.

Both Samsung and SK Hynix are scheduled to announce fourth-quarter earnings on January 29, when they are expected to provide further details on HBM4 orders.

Nvidia CEO Jensen Huang said earlier this month that the company's next-generation chips, the Vera Rubin platform, are in "full production," as the U.S. firm prepares to launch the processors later this year, paired with HBM4 memory chips.