SK Hynix: Sales of HBM and DDR5 chips for AI will double next year

According to businesskorea, SK Hynix is the developer of the world's first 12 layer HBM3 product. Its goal is to double the sales of HBM (high bandwidth memory) and DDR5, the important components of AI servers, next year.

According to industry sources on July 20, at the recent private enterprise briefing (IR) for major institutional investors and securities analysts, SK Hynix predicted that the scale of its two product lines would more than double in 2024.

Due to the surge in demand for artificial intelligence, the prices and demand for HBM and DDR5 are constantly increasing. High performance memory HBM that vertically connects multiple DRAMs is 5 to 6 times more expensive than existing DRAM products. The price of the latest DRAM standard DDR5 is also 15% to 20% higher than its predecessor DDR4.

Although the sales proportion of HBM of SK Hynix is less than 1% in quantity, the sales proportion has increased to about 10%. If the business scale of HBM3 and DDR5 doubles, it is expected to accelerate revenue growth and improve profits. Given that SK Hynix is expected to lose more than 6 trillion won in the first half of this year, it is expected to rebound through the high-value memory market.

Park Myoung soo, vice president of SK Hynix, expressed optimism about the growth of the overall market. He predicted that the share of AI server memory (including HBM, DDR4 and DDR5) in the overall server memory market would grow from 17% this year to 38% five years later, and the demand for new DRAM brought about by AI server effect would accumulate up to 40 billion GB in the next five years. Five years after the integration of artificial intelligence into daily life, the DRAM market is expected to grow three to five times as demand and equipment usage increase.

SK Hynix also revealed the specific roadmap of its next generation products, setting the production target of the sixth generation HBM product HBM4 as 2026. At present, SK Hynix has determined the first half of next year as the time for mass production of the next generation product HBM3E. Technically, SK Hynix has developed its first packaging technology, MR-MUF (Mass Reflow Molded Underfill), which involves stacking chips on chips. SK Hynix said publicly that they would apply the next generation post-processing technology "hybrid bonding" to HBM4 products. Compared with the existing "non-conductive film" process, it improves heat dissipation efficiency and reduces wiring length, thereby achieving higher input/output density. This will increase the current maximum of 12 layers to 16 layers.

The semiconductor industry, including SK Hynix, is expected to have increasingly fierce competition around the technology and quantity of high value-added DRAM. Samsung Electronics plans to begin HBM3 production by the end of this year and plans to invest hundreds of billions of Korean won to double the HBM production capacity at the Zhongnan Tianan factory. From the fourth quarter, Samsung's HBM3 will also be supplied to Nvidia, which is currently exclusively supplied by SK Hynix HBM.

According to TrendForce data, by 2022, SK Hynix will occupy nearly 50% of the HBM market, followed by Samsung (about 40%) and Micron Technology (10%). TrendForce said that as more customers adopt HBM3 chips, SK Hynix's market share will further increase to 53%. In addition, Samsung and Micron will occupy 38% and 9% respectively.