Record Quarterly Sales in Q2
Accelerating HBM Leadership
12-Stack Samples Provided to Customers
HBM4 12-Stack Shipments Starting in Second Half of Next Year
Expansion of NAND eSSD Sales
NAND Prices Expected to Rise 15-20% in Q3
Estimated Annual Operating Profit of 24 Trillion Won This Year
SK Hynix, which recorded its highest-ever sales in the second quarter of this year, will begin supplying the 5th generation high-bandwidth memory (HBM), HBM3E, to customers starting from the fourth quarter to solidify its leadership in HBM. The 6th generation HBM4 is planned to be shipped from the second half of next year, starting with 12-layer products.
Kim Woo-hyun, Vice President and CFO of SK Hynix, stated during the Q2 earnings conference call on the 25th, "We have already provided samples of the 12-layer HBM3E products to demand customers and will start mass production from this quarter (Q3) as planned," adding, "We will begin customer supply in Q4." He also said, "We significantly expanded HBM3E shipments in Q2, and in Q3, HBM3E shipments will greatly surpass those of HBM3 (4th generation). We expect HBM3E shipments to account for more than half of total HBM shipments this year."
SK Hynix has been virtually the exclusive supplier of the 4th generation HBM, HBM3, to Nvidia, a major player in the AI semiconductor market. In March, SK Hynix became the first memory company to deliver the 5th generation HBM3E 8-layer products to Nvidia. Especially, with Nvidia accelerating its next-generation graphics processing unit (GPU) launch roadmap, the impact of SK Hynix’s HBM3E supply is expected to be reflected rapidly. The company expressed confidence during the conference call, stating, "If the product launch cycle for customers’ GPUs shortens, the AI market size will expand, positively influencing the demand for HBM products. This will create a favorable environment for a 'leader' who has mastered all capabilities including technological competitiveness, abundant mass production experience, and skills."
SK Hynix is showcasing its technological superiority and stable production capacity compared to competitors by publicly disclosing the HBM yield (ratio of good products), which is considered a trade secret. Global credit rating agency S&P Global recently reported, "SK Hynix stated that the HBM3E yield is approaching 80%, which is significantly higher than competitors," and assessed that "it is unlikely to lose its top sales position in the next one to two years."
SK Hynix also anticipates continued growth in demand for AI server memory in the second half of this year. With the release of PC and mobile products supporting on-device AI, sales of high-performance memory are expected to increase, along with demand for general memory products. In particular, the company plans to ship 12-layer HBM4 products starting from the second half of next year. A company official said, "We expect demand for 16-layer HBM4 products to arise in 2026, so we plan to develop them accordingly," adding, "We are reviewing both advanced MR-MUF and hybrid bonding methods."
In NAND, SK Hynix plans to expand sales of high-capacity enterprise solid-state drives (eSSD), where demand is growing. In Q2, SK Hynix’s NAND performance was driven by expanded sales of eSSD and mobile products, with eSSD sales increasing by about 50% compared to Q1, maintaining a steep growth trajectory.
The recovery in the NAND flash market is also a positive factor. According to market research firm TrendForce, enterprise solid-state drive (SSD) prices are expected to rise by 15-20% in Q3 compared to the previous quarter.
Supported by the dual engines of HBM and NAND, SK Hynix is expected to achieve its highest annual performance this year. After posting a loss of 7.7303 trillion KRW last year, SK Hynix’s annual operating profit this year is estimated to reach 24 trillion KRW. This surpasses the operating profit of 20.844 trillion KRW recorded during the 'super cycle' in 2018. The operating profit margin is also expected to exceed 35%.
Taiwanese market research firm TrendForce recently forecasted in its memory industry report that this year’s DRAM sales will increase by 75% from last year to 90.7 billion USD, and NAND flash sales will rise by 77% to 66.2 billion USD. Especially, next year’s memory sales are expected to reach an all-time high. The sales forecasts for DRAM and NAND are 136.5 billion USD and 78.6 billion USD respectively, representing increases of 51% and 29% compared to this year. The average selling price of DDR5 DRAM in Q3 this year is expected to rise by 8-13%, while existing DRAM prices are forecasted to increase by 5-10%. With DRAM prices rising, the company’s performance improvement is expected to accelerate further.
Vice President Kim Woo-hyun said, "Under a profitability-focused investment policy, we were able to reduce borrowings by about 4.3 trillion KRW compared to Q1 while making essential investments during Q2," adding, "Based on a stable financial structure, we will focus on leading-edge process technology and high-performance product development to further solidify our position as a leading AI memory company."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
