Variscite

Samsung’s AI Strategy Hits Variscite

Posted on by Techtime

Photo above: Variscite production floor at Kiryat Gat, Israel. Credit: Techtime

Samsung Electronics’ primary focus is currently on competing with Korea’s SK Hynix for manufacturing orders of memories for NVIDIA’s AI computers. As part of this effort, it is even diverting the output of memory production lines from industrial products toward manufacturing of HBM memory devices needed in the largescale AI data centers. This move is being carried out quietly, without public press releases or announcements to investors. Nevertheless, it is already being felt keenly in the industry. The manufacturer of Industrial System on Modules, Israel-based Variscite, is now dealing with a memory shortage as a result of Samsung’s clandestine move.

The Sales Engine of Telsys

Variscite isa fully-owned subsidiary of Telsys. In its Q2 2025 earnings report published last week, Telsys explained that Samsung supplies Variscite with about 20% of the memory components it uses. “Due to delays in the supply of memory components,” a Samsung memory supplier explained to Variscite’s management, “the company has decided to divert its memory production line in favor of manufacturing products for the AI market.”

Samsung has not released an official statement on the move, but the information was received verbally in July 2025 from Samsung’s Israeli supplier. “This obliges Variscite to purchase memory from other manufacturers, including Micron, which even today supplies a large portion of the memory components used by the company.”

Variscite specializes in the development and manufacturing of System on Modules (SoMs) intended for integration into its customer’s systems, along with Development Kits and Expansion Boards for these modules. The company’s SoM manufacturing facility is located in Kiryat Gat (south of Israel). It currently accounts for the majority of Telsys Group’s sales. In the first half of 2025, its sales totaled approximately NIS 142 million (compared to NIS 146.7 million in the first half of 2024).

Samsung Woos NVIDIA

Samsung is currently concentrating a major effort on manufacturing large, high-speed memory components (HBM3E) for NVIDIA, and on gaining an advantage in the production of the next-generation components, HBM4. These new memories are intended for use in large data centers running primarily AI applications and AI Large Language Model (LLM). In the coming weeks, it is expected to receive final approval that its HBM3E memories have successfully passed NVIDIA’s qualification tests.

Morgan Stanley’s research department estimates that upon receiving certification, it will begin mass production for NVIDIA as early as November 2025. Telsys clarified that Variscite still has a stock of memory components that should be sufficient to fulfill short-term customer orders. However, if Samsung’s decision does not change, “Variscite may be required to extend delivery times for some of its customers, while simultaneously securing the purchase of memory components from other manufacturers.”

Variscite achieved a Company Value of $250 million

Posted on by Techtime

The Lod-based (near Tel aviv) Variscite achieved a valuation of $250 million as part of a transaction in which Telsys Ltd. increases its holdings in the company. Telsys has announced that it will acquire 2.31% of Variscite’s shares for approximately $5.78 million. Prior to the transaction, Telsys held 68.4% of Variscite’s shares. The second-largest shareholder in the company is Arledan Technologies, which holds 20.3% of its shares.

During Q3 2020, Variscite’s sales totaled NIS 49.99 million, compared with NIS 42.76 million last year. Telsys reported that the growth stemmed from increased demand for the production of products related to the COVID-19 crisis. To tackle the COVID-19 crisis, Variscite had increased its inventories by NIS 11 million to ensure orders were not delayed due to supply chain difficulties.

Partnership with NXP

Variscite employs approximately 90 employees and is is developing, producing and manufacturing ARM-based System on Modules (SoM) that meet military, industrial and medical standards. Its modules provide the computing core for other products, such as robotics systems, medical devices, industrial systems, etc. It has a strategic partnership with NXP, which gives it initial access to i.MX processors even before they hit the market.

In September this year, Variscite announced a new card based on the i.MX 8M Plus. It is a family of heterogeneous application core processors based on more than one architecture. It includes quad-core ARM Cortex-A53 processors, a single-core ARM Cortex-M7 processor for real-time processing applications, a neural network accelerator (Vivante VIP8000), a DSP processor for audio signal processing, and two built-in image signal processors (ISPs).

In the first nine months of 2020, its sales amounted to NIS 148.73 million, compared with sales of NIS 130.42 million in the corresponding period last year. Variscite’s parent company, Telsys, is still battling the consequences of the discontinuation of work vis-à-vis Texas Instruments (TI), which has decided to stop working with most of the distributors in the world and focus mainly on direct sales. In the third quarter of 2020, sales in its distribution segment amounted to NIS 26.5 million, compared with sales of NIS 34.5 million last year. Telsys is traded on the Tel Aviv Stock Exchange at a market value of approximately NIS 826 million.