[News] SK hynix Financial Report Exceeds Expectations, with Predicted Memory Capacity Allocation Benefiting Taiwanese Manufacturers

Global HBM leader, South Korea’s SK hynix, announced its financial report for the last quarter on July 25, exceeding market expectations. According to a report from Economic Daily News, the company also announced a full-scale effort to boost production of high-bandwidth memory (HBM) for AI, with this year’s capital expenditure expected to surpass initial projections. Additionally, more capacity will be allocated for HBM production.

Industry sources cited by the report also indicate that for Taiwanese manufacturers, the major global memory companies are expanding their HBM production capacity by converting existing DRAM capacity to HBM. This shift will suppress the supply of DDR4 and DDR5 DRAM, positively impacting market conditions.

Previously, as per sources cited by the Economic Daily News, it’s indicated that global memory leader Samsung plans to allocate about 30% of its existing DRAM capacity to HBM production. Now, with SK hynix reportedly making similar plans, this may benefit Taiwanese DRAM-related companies like Nanya Technology and ADATA in the future.

Reportedly, Nanya Technology is said to believe that the DRAM market has significantly improved due to the production cuts by the three major memory manufacturers—Samsung, SK hynix, and Micron—in the second half of last year, combined with the strong demand for HBM driven by generative AI. This chain reaction is spreading to various types of DRAM, and the company expects to see clear operational improvements soon.

SK hynix announced yesterday that its Q2 revenue increased by 125% year-on-year to KRW 16.4 trillion (USD 11.9 billion), setting a new record. Operating profit reached KRW 5.47 trillion, the highest since Q3 2018, significantly better than the KRW 2.9 trillion loss in the same period last year. The operating margin was 33%, exceeding expectations, mainly due to a more than 250% surge in HBM sales and an overall increase in DRAM and NAND chip prices.

SK hynix plans to begin mass production of the next-generation 12-layer HBM3e chips this quarter, enhancing its competitive edge over rivals Samsung and Micron in the design and supply of advanced memory for NVIDIA’s AI accelerators. HBM3e is expected to account for about half of all HBM chip sales this year. Additionally, capital expenditure for this year is likely to exceed initial expectations.

SK hynix predicts that the overall memory market will continue to grow in the second half of the year, with DRAM and NAND chip supply becoming tighter and demand for AI servers remaining strong.

Read more

• [News] AI Boosts HBM Demand, SK Hynix’s Q2 Profits Reach Six-Year High
• [News] SK hynix, TSMC, and NVIDIA Reportedly Forge Alliance to Develop Next-Generation HBM

(Photo credit: SK hynix)