Businesses around the world are ramping up their efforts in the field of artificial intelligence (AI), and South Korean company SK Hynix is no exception. In fact, the company recently announced that its high-bandwidth memory (HBM) chips have already sold out for this year, and they are nearly sold out for 2025 as well. This news comes as no surprise, considering the increasing demand for HBM chips due to the growing size of data and AI models.
During a recent news conference, Kwak Noh-Jung, CEO of Kwak Noh-Jung Corporation, expressed his belief that the HBM market will continue to expand in the coming years. He stated that the annual growth rate of demand for HBM chips is expected to be around 60% in the medium and long term. This projection highlights the significant role that HBM chips will play in supporting the future development of AI technologies.
SK Hynix faces competition in the HBM market from companies like Micron Corporation and Samsung Electronics. Until March, SK Hynix was Nvidia’s sole supplier of HBM chips. However, to maintain their operating margins, major purchasers of AI chips are now seeking to diversify their suppliers. Nvidia currently dominates approximately 80% of the AI chip market.
Micron Corporation has already allocated the majority of its supply for 2025, indicating that they have sold out of their HBM chips for 2024. The company plans to provide customers with samples of their 12-layer HBM3E chips starting in March. Interestingly, market analysts suggest that there is a higher demand for ultra-high-performance chips like the 12-layer ones compared to the 8-layer HBM3Es.
Samsung Electronics is also making strides in the HBM market. They are set to produce their own HBM3E 12-layer chips in the second quarter of this year. The company recently announced that they expect shipments of HBM chips to more than triple this year, and they have already completed supply discussions with their customers. While no further details were provided, it is clear that Samsung is positioning itself as a key player in the HBM market.
SK Hynix has been proactive in expanding its operations to meet the growing demand for HBM chips. They recently announced plans to build a $3.87 billion chip packaging facility in Indiana, USA, which will include an HBM chip line. Additionally, they are investing 5.3 trillion won ($3.9 billion) in a new DRAM chip factory in South Korea. Notably, SK Hynix’s approach differs from traditional patterns in the memory chip industry, as they are increasing capacity only after determining demand.
Justin Kim, head of AI infrastructure at SK Hynix, predicts that AI chips, including HBM and high-capacity DRAM modules, will make up 61% of all memory volume in terms of value by 2028. This is a significant increase from the current 5% share in 2023. These projections highlight the growing importance of AI chips in the evolving tech landscape.
However, SK Hynix also warned that there may be a shortage of regular memory chips by the end of this year if demand for tech devices exceeds expectations. This highlights the need for companies to closely monitor market trends and adjust their production accordingly.
Looking ahead, Nvidia, one of the major players in the AI chip market, is set to introduce its latest HBM chip called the 12-layer HBM3E. Samples of this chip will be available in May, followed by mass production in the third quarter. Nvidia’s involvement further solidifies the significance of HBM chips in the AI industry.
In conclusion, the demand for HBM chips is on the rise as businesses continue to expand their AI services. Companies like SK Hynix, Micron Corporation, and Samsung Electronics are actively working to meet this demand and establish their presence in the market. With the increasing importance of AI chips, it is essential for businesses to stay ahead of the curve and adapt to the evolving technological landscape.