[News] SK Hynix Scales Back CIS Operations, Shifts Focus to HBM

---

---

According to a report by ZDNET Korea, SK Hynix has scaled back its less profitable CMOS image sensor (CIS) and foundry businesses while reinforcing a strategy that focuses on high-margin high-bandwidth memory (HBM) and AI memory.

Citing industry sources, ZDNET Korea noted that SK Hynix has reduced its R&D investment in CIS and cut production capacity by more than half compared to last year, with estimated monthly output of 12-inch wafers dropping to fewer than 7,000 units. Additionally, staff from the system-on-chip (SoC) design department, previously responsible for designing memory controllers, are being reassigned to the HBM division.

The report also mentions that SK Hynix has increased its SoC design workforce this year, directing them toward projects aimed at developing next-generation memory solutions with computational capabilities.

SK Hynix’s strategy is to downsize certain business areas and concentrate resources on the more profitable HBM. The company is also focusing on future growth areas such as Compute Express Link (CXL), processing-in-memory (PIM), and AI solid-state drives (AI SSD).

The report quotes a semiconductor industry expert stating that it takes only three months to achieve return on investment (ROI) after establishing an HBM production line. For companies, investing heavily in HBM, which has high demand and profitability, is a logical decision.

TrendForce has noted that HBM’s average selling price is several times higher than that of conventional DRAM, with a price gap around five times greater than DDR5. While contract prices for general DRAM and NAND are expected to fall in the fourth quarter, HBM prices are projected to rise by 8% to 13%.

In fact, the news of reduced CIS R&D and production capacity is not new. Earlier this year, media outlets reported that due to decreasing demand, SK Hynix planned to reduce its CIS production and shift focus to its HBM business.

Additionally, SK Hynix has downsized its foundry business. According to a May report by the Korea Economic Daily, the board of directors of SK Hynix’s foundry subsidiary, SK Hynix System IC (Wuxi) decided to sell a 21.3% stake in its Wuxi plant to the Wuxi Industrial Development Group for an estimated $349.3 million.

(Photo credit: SK Hynix)