Record-Breaking Earnings Announcement Followed by Conference Call
"Many Technological Changes Including Logic Die Utilization"
"Establishing a 'One Team' System with TSMC"
HBM3E "Demand Increasing More Than Initially Expected"
12-Layer > 8-Layer Expected in Early Next Year
"Focus on Investment in Leading-Edge Process Transition"
SK Hynix announced that following its better-than-expected performance in the third quarter of this year, it plans to develop high-bandwidth memory (HBM) by generation according to its existing schedule and launch it to the market in a timely manner.
During the conference call held after the earnings announcement on the 24th, SK Hynix stated regarding the 6th generation HBM4, "The number of input/output (I/O) terminals will double, new skills will be applied for low power performance, and for the first time, logic dies will be utilized, indicating many technical changes are expected." They added, "Accordingly, much deeper technical exchanges beyond the existing test scope are necessary. We have established a one-team system with the foundry company (TSMC) to collaborate closely."
They continued, "We are preparing for HBM4 mass production by applying the already verified 1b㎚ advanced MR-MUF technology, aiming for customer shipments in the second half of 2025 as planned. We intend to secure not only timely supply but also investment efficiency to continuously maintain market leadership and profit stability."
SK Hynix announced that it achieved sales of KRW 17.0573 trillion and operating profit of KRW 7.03 trillion in the third quarter of this year, marking an all-time high. This is estimated to have been driven by HBM. The company said that HBM accounted for 30% of DRAM sales, and this ratio is expected to reach the 40% range in the fourth quarter.
SK Hynix stated, "HBM sales led revenue growth, increasing by more than 70% compared to the previous quarter and over 330% year-on-year." In particular, they emphasized, "During the third quarter, shipments of the 5th generation HBM3E surpassed those of the previous 4th generation HBM3," suggesting that the transition to a profit structure with improved-performance HBM products is progressing smoothly.
Regarding HBM3E, they analyzed, "Demand is increasing faster than initially expected." They added, "The 12-stack HBM3E product has already started mass production since September and is scheduled to ship from this quarter as planned." They further stated, "With customers launching new products, next year's HBM market demand is expected to rapidly shift from 8-stack to 12-stack HBM3E." They also noted, "The 12-stack HBM3E is expected to surpass the sales volume of the 8-stack HBM3E in the first half of next year," and "By the second half of next year, most of the volume is expected to be 12-stack products."
SK Hynix said, "As the increase in stack count raises process complexity, we have prepared in advance for smooth mass production and plan to secure 12-stack demand through close collaboration with customers." They added, "As with the 8-stack, we plan to lead market share with the HBM3E 12-stack product." Furthermore, they stated, "Since the highest industry characteristics have been secured in terms of specialty, we will continue to lead the HBM market through product differentiation."
SK Hynix also viewed that having already agreed with customers on the volume and pricing of HBM to be supplied next year will greatly help maintain its market leadership in HBM. Regarding concerns raised in some parts of the market about a slowdown in HBM demand, the company said, "We consider it premature."
They highlighted that high-value-added enterprise solid-state drives (eSSD) accounted for more than 60% of NAND sales in the third quarter, contributing to performance, and pledged to focus on development and investment in this area. SK Hynix is currently the only company in the industry mass-producing 60TB products and is undergoing certification procedures aiming to supply 122TB products in the first half of next year. Last month, they developed the 'PEB110,' a PCIe 5th generation eSSD product applying 238-layer technology. They also plan to reduce production of DDR4 and LPDDR4, whose demand is slowing this year, while accelerating the transition to advanced processes needed to expand production of HBM, DDR5, and LPDDR5.
SK Hynix stated, "Next year, we plan to focus investments on transitioning to advanced processes to stably supply products with clear demand such as HBM, DDR5, LPDDR5, and eSSD." They added, "We are reviewing multiple scenarios to adjust proactive investments in case of market downturns." Infrastructure investment next year is expected to increase compared to this year due to investments in M15X and the first phase of the Yongin cluster fab (semiconductor manufacturing plant). Regarding this, SK Hynix said, "The contribution timing of DRAM production from the M15X, which will be completed first, is expected to be in 2026," and "We plan to flexibly adjust the mass production timing and scale of new fabs according to demand."
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