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On the 24th, SK hynix’s stock rose over 4 percent. The impact of NVIDIA’s significant earnings surprise announcement for the second quarter, surpassing market expectations, played a major role. NVIDIA, a U.S. semiconductor company, holds over 90 percent of the GPU (Graphics Processing Unit) market, a core chip for AI (Artificial Intelligence) semiconductors, and SK hynix is a key supplier of DRAM memory to NVIDIA. SK hynix possesses cutting-edge technology in HBM (High Bandwidth Memory), memory chips specifically designed for AI semiconductors. HBM vertically connects multiple DRAMs to significantly enhance data processing speed compared to conventional DRAM, making it essential for AI semiconductors that handle massive data processing.

Despite the prolonged downturn in the memory semiconductor market, SK hynix’s stock price has risen by 53 percent this year. This rate is three times higher than Samsung Electronics’ stock price increase and surpasses the approximately 30 percent increase seen in Micron and Intel. SK hynix’s stock price has consistently surged significantly upon NVIDIA’s earnings announcements. After SK hynix revealed in its second quarter earnings announcement on the 26th of last month that its HBM business would double next year, the stock price soared by 9.7 percent the following day. The Wall Street Journal analyzed the global HBM market in an article titled “NVIDIA’s AI Partner” and evaluated that “SK hynix dominates the hottest semiconductor field in the world.” SK hynix has positioned itself as a major beneficiary of the global AI market’s upward trend with its emphasis on HBM technology.

◇ SK hynix Takes the Lead in AI Memory Domain

SK hynix was the first in the industry to initiate the development of HBM technology. In collaboration with AMD in 2013, it introduced the first HBM product to the market. At the time, as AI technology began to be applied in various industries, there was a recognition that a revolutionary next-generation memory was needed to surpass the existing performance. Despite trailing behind Samsung Electronics in areas like NAND flash stacking technology, the strategy was to secure the lead in the next-generation market. In the early stages of development, there were criticisms of the uncertain usage of HBM, even labeling it as “money-draining unreasonable development.” However, with the explosive growth of the AI market sparked by the emergence of models like ChatGPT, HBM started to shine.

According to market research firm TrendForce, as of June, SK hynix held 53 percent of the global HBM market, while Samsung Electronics held 38 percent, and Micron 9 percent. Although SK hynix fell to the third position in the DRAM market in the first quarter, losing out to Micron, it regained the second position in the second quarter due to strong HBM sales performance. The Wall Street Journal stated, “While SK hynix hasn’t been considered a pioneer in the semiconductor industry so far, its bet on the HBM business has turned that around.”

Thanks to proactive investments, SK hynix is also recognized for having leading technological edge. On the 21st, the company unveiled the next-generation HBM chip “HBM3E.” This semiconductor is capable of processing data equivalent to the capacity of 230 full HD (ultra-high-definition) movies in one second. Recently, it began supplying samples to key customers like NVIDIA and plans to enter full-scale production in the first half of next year.

◇ Samsung Electronics and Micron on the Chase

While SK hynix holds an advantage in HBM technology and production, it’s difficult to guarantee its future dominance in the market. This is because the relentless pursuit by Samsung Electronics, the world’s leading memory company, and Micron, ranked third, is far from insignificant. Samsung Electronics is preparing to release the next-generation HBM model by the end of this year and is expanding production capacity through massive investments. Micron has also announced the expansion of its HBM business.

Companies are diving into HBM due to the added value that surpasses traditional memory semiconductors. The global HBM market is worth $2.04 billion (approximately ￦2.6 trillion) this year, accounting for only 1 percent of the entire DRAM market. However, it is projected to grow to around $6.3 billion by 2028, with an annual growth rate of over 30 percent. With chip prices six times higher than regular DRAM, it offers the potential for high profitability. A semiconductor industry insider stated, “Until now, the memory industry has expanded its market size with significant catalysts such as the emergence of smartphones and growth in data centers. The next growth driver is the AI semiconductor market,” emphasizing that major memory companies are aggressively investing in HBM to seize this prime opportunity.

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