'HBM War' Ignites... Vertical Showdown Between SK and Samsung

SK Hynix Advances Mass Production of 12-Layer
Countering Samsung Electronics' Q2 Mass Production Announcement

HBM Market Expands, Intensifying Competition Between Two Companies
"HBM Demand Growing at 60% Annual Rate"

SK Hynix has officially announced that it will advance the mass production timing of its 5th generation High Bandwidth Memory (HBM3E) 12-stack product to the third quarter of this year, sparking what analysts see as a new battle in the HBM market. Foreign media have evaluated this move as SK Hynix's effort to get ahead of Samsung Electronics. This marks the beginning of a rebellion by SK Hynix, the perennial second place in the DRAM market.

Bloomberg reported on the 2nd (local time) that "SK Hynix revealed that almost all HBM volumes are booked until next year, showing the surging demand for semiconductors essential for AI development," and added, "The announcement of targeting mass production of next-generation HBM (HBM3E 12-stack) in the third quarter of this year is a move to get ahead of Samsung Electronics."

SK Hynix's confidence can be confirmed from its first-quarter earnings. The company recorded an operating profit of 2.886 trillion KRW, about 1 trillion KRW more than Samsung Electronics' semiconductor (DS) division's 1.91 trillion KRW. The ratio of operating profit to sales was also nearly three times higher for SK Hynix at 23.2%, compared to Samsung Electronics' 8.25%. This means SK Hynix has secured a larger financial buffer to accelerate next-generation memory production.

This was largely influenced by SK Hynix's lead in the High Bandwidth Memory (HBM) market, which is gaining attention as memory for artificial intelligence (AI). SK Hynix stated that most of its HBM volumes are sold out not only for this year but also for next year. The 6th generation HBM, HBM4, which was originally scheduled for mass production in 2026, has also been advanced by one year to next year.

SK Hynix also claimed that its cumulative HBM sales would be larger than Samsung Electronics' after Samsung disclosed its own figures. On the 2nd, Samsung Electronics announced that its total HBM sales from 2016 to this year would exceed 10 billion USD. On the same day, SK Hynix President Kwak No-jung responded at a briefing, saying, "It is likely in the mid-10 billion USD range, around several tens of billions of dollars." Although neither company revealed exact figures, the industry interprets this as implying SK Hynix is ahead.

Behind SK Hynix's confidence is the presence of NVIDIA, a US AI semiconductor company. SK Hynix has driven its performance by supplying products to NVIDIA, a major player and leader in AI semiconductors in the HBM market.

Samsung Electronics also appears to be staking its fate on the HBM market. Following the start of mass production of HBM3E 8-stack last month, it has announced plans to mass-produce HBM3E 12-stack products within the second quarter. Regarding HBM4, Samsung has stated it will complete development next year, and the industry expects mass production to likely occur in the same year.

Kyung Kye-hyun, President of Samsung Electronics' DS Division, has also ignited competition by declaring the intention to gain an advantage in the HBM market. At a recent internal event, President Kyung said, "We did not win in the early AI market," and added, "We must win the second round." In March, on his social media account, he revealed that customers want HBM3 and HBM3E 12-stack products, and expressed confidence in HBM4 by saying, "Customers will work with us on that (customized HBM4 development)."

The semiconductor industry expects that the phenomenon of HBM demand exceeding supply due to AI effects will continue for some time, intensifying competition between the two companies, which currently hold over 90% market share in the HBM market.

Market research firm TrendForce forecasted that this year's DRAM market sales will increase by 62.25% year-on-year to 84.15 billion USD, with HBM accounting for 20.1% (16.91415 billion USD) of that. Compared to last year's HBM share of 8.4% in the DRAM market, this indicates a significant expansion of the HBM market.

SK Hynix predicted that the share of AI memory, including HBM and high-capacity DRAM modules, which accounted for about 5% of total memory market sales last year, will grow to 61% by 2028. President Kwak said regarding this, "HBM demand is increasing sharply, and visibility of HBM demand has become clearer compared to just six months ago." He added, "The HBM market will continue rapid growth due to various factors, and in the mid-to-long term, as HBM demand diversifies, an annual demand growth rate of about 60% is expected."