SK Hynix "HBM Sales Reach $13 Billion to $17 Billion... Market Demand Grows 60%" (Summary)

SK Hynix Holds Press Conference in Icheon
President Kwak Nojeong and AI-Related Executives Attend

Positive Outlook for HBM and NAND Memory Markets
HBM3E 12-Stack Product Mass Production Scheduled for Q3

"(From 2016 to this year) the cumulative sales of High Bandwidth Memory (HBM) are expected to be in the mid-$10 billion range. After this year, the HBM market is projected to continue growing alongside rising demand from Artificial Intelligence (AI), with a mid-to-long-term annual demand growth rate of about 60%."

On the 2nd, Kwak No-jeong, President of SK Hynix, made these remarks during a Q&A session at a press conference held at the company's headquarters in Icheon, Gyeonggi Province. At the conference themed "AI Era, SK Hynix Vision and Strategy," President Kwak positively evaluated the HBM market, stating, "Cloud Service Providers (CSPs) are expanding their investments in AI servers, and the quality of AI services is improving, which has increased the visibility of additional demand."

Kwak No-jeong, President of SK Hynix, is holding a press conference on the 2nd at the Icheon headquarters under the theme "AI Era, SK Hynix Vision and Strategy." / Photo by SK Hynix

Earlier, President Kwak had revealed AI business plans during a press conference at CES 2024, the world's largest electronics and IT exhibition held in Las Vegas, USA, in January. After about four months, he held a press conference domestically, actively engaging in communication. This was the first time a president-level press conference was held in Korea.

The event was also attended by key executives including President Kim Ju-seon (in charge of AI Infra), Vice President Kim Jong-hwan (in charge of DRAM development), Vice President Ahn Hyun (in charge of N-S Committee), Vice President Kim Young-sik (in charge of manufacturing and technology), Vice President Choi Woo-jin (in charge of P&T), Vice President Ryu Byung-hoon (in charge of future strategy), and Vice President Kim Woo-hyun (CFO).

Regarding concerns arising from increased supply due to market participation by competitors such as Samsung Electronics and US-based Micron, President Kwak explained, "The risk of oversupply will gradually decrease." He elaborated that unlike general DRAM, HBM investments are demand-driven and the product is evolving into customized solutions, resulting in a business structure different from generic products.

He also reflected on the long time required to secure competitiveness in AI semiconductors. President Kwak said, "Since SK Hynix joined the SK Group in 2012, the memory market has been unfavorable, and while many companies reduced investments, SK Hynix decided to increase investments." He added, "Decisions were made to expand investments across all fields, including HBM investments, even though the market opening timing was uncertain." He continued, "As a result, we achieved the world's first development of HBM in 2013. Given the nature of HBM, collaboration with customers and partners is crucial, and this was carried out closely and effectively." He also noted, "Chairman Chey Tae-won’s global networking also influenced the securing of HBM leadership."

From the left, Kim Juseon, President (in charge of AI Infra), Kwak Nojeong, CEO and President, Ahn Hyun, Vice President (in charge of N-S Committee), Kim Woohyun, Vice President (CFO) /
[Photo by SK Hynix]

SK Hynix also emphasized technologies such as MR-MUF, which form the foundation of HBM competitiveness. Vice President Kim Jong-hwan said, "Based on industry-leading extreme ultraviolet (EUV) process productivity and 1㎚ (1㎚ = one-billionth of a meter) level completion, the ramp-up of HBM3E mass production is also progressing stably." He added, "MR-MUF was first applied starting with HBM2E 4-stacks, and it maintains top-level quality competitiveness in HBM3 and HBM3E 8-stacks as well." He further explained, "HBM3 12-stacks are already in mass production using MR-MUF, and we are confident that we can continuously maintain the highest quality level in a timely manner according to customer demand."

Regarding concerns raised last month about semiconductor market growth possibly being lower than expected, the company assessed that "we have entered the early stage of a full recovery cycle where profitability is expanding due to supply-demand improvements such as sustained strong AI demand." President Kim Ju-seon said, "HBM has a large die size and many process steps, so if production capacity allocation increases for premium products like HBM, general DRAM production may decrease, and inventory is rapidly declining." He forecasted, "From the second half of the year, demand for traditional applications such as PCs, mobile devices, and general servers will improve, leading to stable growth in the memory market." He added, "The company's price negotiations and volume discussions are not as bad as expected," and "since a supplier-friendly pricing environment is expected to continue, the memory market outlook for this year is quite positive."

SK Hynix also expressed optimism about the recently recovering NAND market. Vice President Ahn Hyun said, "From the first quarter, demand for high-capacity solid-state drive (SSD) products, which are core to NAND memory demand for AI server storage, has fully materialized, turning the market from a downturn lasting 1.5 to 2 years into growth." He explained, "Next year, as adoption of PC and mobile on-device AI products increases, demand for NAND for personal devices is also expected to expand, anticipating significant sales and profit growth." He added, "For the rapidly growing high-capacity SSD demand, we have the world's only QLC-based high-capacity 60-terabyte (TB) eSSD ready, and SK Hynix will develop a QLC-based 60TB product this year." He further stated, "Next year, we plan to prepare ultra-high-capacity products up to 300TB and respond to customers together with Solidigm."

To develop the 6th generation HBM, HBM4, SK Hynix plans to strengthen cooperation with Taiwanese foundry company TSMC. President Kim said, "We have had extensive technical collaboration with TSMC before, and recently we have discussed much deeper technical exchanges." He explained, "HBM consists of core dies and base dies. Up to HBM3E, we produced them using DRAM processes, but starting with HBM4, there is a challenge to maximize performance and efficiency, so we plan to use logic processes and collaborate with TSMC to manufacture the base dies."

The plan for future fab construction at the Yongin cluster will be flexibly decided according to market demand. Vice President Kim Young-sik said, "Currently, for Phase 1 of the first fab, we plan to start construction next year and complete it two years later, based on the DRAM products to be produced at that time." He added, "There are no fixed plans for Phase 2 or the second fab; supply will proceed according to market demand."

HBM volumes sold out through next year... 12-stack HBM3E mass production planned for Q3

President Kwak announced at the conference that HBM volumes have mostly sold out not only this year but also through next year, implying that supply cannot keep up with demand.

He explained, "To further solidify market leadership from a technology perspective, we plan to provide samples of the world's highest-performance HBM3E 12-stack product in May and prepare for mass production in the third quarter." He added, "Going forward, for substantial 'qualitative growth,' we plan to strengthen cost competitiveness, increase sales centered on high-profit products to continuously improve profitability, and enhance financial soundness through investment methods that flexibly respond to changing demand environments."

From the left, Vice President Byunghoon Ryu (in charge of Future Strategy), Vice President Woojin Choi (in charge of P&T), Vice President Youngsik Kim (in charge of Manufacturing Technology), President Juseon Kim (in charge of AI Infra), CEO President Nojung Kwak, Vice President Hyun Ahn (in charge of N-S Committee), Vice President Woohyun Kim (CFO), Vice President Jonghwan Kim (in charge of DRAM Development) /
[Photo by SK Hynix]

President Kwak also stated, "Based on technological competitiveness, SK Hynix will provide differentiated value to customers and secure production capacity that can respond promptly to customer demand, growing into the most trusted and solid company for customers in the AI era." He emphasized, "As a leading global semiconductor company, we will contribute not only to local communities where fabs are located, such as Icheon, Cheongju, and Yongin, but also to the Korean economy, and lead Korea to become a strong AI semiconductor powerhouse."

At the event, President Kim presented the 'AI Memory Vision,' Vice President Choi discussed 'SK Hynix HBM Core Technologies and US Advanced Packaging Initiatives,' and Vice President Kim presented on 'Cheongju M15X and Yongin Cluster Investments.' Vice President Choi said, "Last month, we finalized plans to build an advanced packaging production base for AI memory in West Lafayette, Indiana." He added, "The Indiana plant is scheduled to begin mass production of next-generation HBM and other AI memory products from the second half of 2028." He also explained, "Indiana is a key hub in the semiconductor ecosystem known as the Silicon Heartland, centered in the US Midwest."

Vice President Kim said, "To meet the rapidly increasing AI memory demand, capacity expansion was necessary before the first fab operation at the Yongin semiconductor cluster in 2027, so we decided to build M15X in Cheongju." He added, "It will have an integrated HBM production process including EUV, and being adjacent to M15, which is expanding TSV production capacity, will maximize HBM production efficiency."

Regarding the Yongin cluster, he said, "The site preparation for Phase 1, where SK Hynix's first fab will be built, is 42% complete and progressing on schedule." He added, "Construction is planned to start in March 2025 and complete by May 2027." He further explained, "A mini fab will also be constructed in the cluster, providing material, parts, and equipment (SoBuJang) companies with the best solution to verify prototypes in an environment similar to actual mass production and enhance technology completeness."