Unlike semiconductor equipment makers such as ASML, which are highly exposed to the fluctuation in China, SK hynix’s outlook seems to be promising thanks to the strong HBM demand from U.S. According to its quarterly report released on November 15th, cited by Korean media outlet newdaily, with the full-scale supply of HBM3e to NVIDIA, the company’s sales in the U.S. have reached an all-time high in Q3, with robust momentum expected throughout next year.
According to the report, U.S. accounted for 64% of SK hynix’s sales in Q3, a 5 percentage point increase from the previous quarter and a 17 percentage point increase year-over-year, hitting a record high.
In terms of monetary value, SK hynix sold 11.327 trillion Korean won (roughly USD 8.7 billion) worth of memory to the U.S. in Q3 alone, which is just slightly less than its U.S. sales combined in the first half of the year, according to newsdaily.
NVIDIA’s Blackwell Would Provide Boost to Growth from Q4 Onward
Notably, the strong momentum of the U.S. market could largest be attributed to HBM. In September, SK hynix confirmed in a press release that it has begun volume production of the world’s first 12-layer HBM3e. Shortly after, in November, the company announced that it is developing the world’s largest capacity 16-layer HBM3e.
According to newsdaily, there is growing anticipation on SK hynix for even higher U.S. sales in Q4 and next year, as NVIDIA’s upcoming release of Blackwell is expected to drive a surge in HBM supply starting from this quarter.
The newdaily report further notes that in 2024, NVIDIA’s most advanced AI accelerator models are expected to feature the HBM3e 12-layer product for the first time, presenting new opportunities for SK hynix. With its leadership in 8-layer and 12-layer mass production, SK hynix is likely to grow its sales at an even faster pace.
The momentum onward is robust indeed. According to previous reports by Reuters and South Korean media outlet ZDNet, NVIDIA CEO Jensen Huang requested SK hynix to accelerate the supply of HBM4 by six months. In October, the company said that it planned to deliver the chips to customers in the second half of 2025, according to the reports.
Subsidiary in Indiana Established to Capitalize U.S. Opportunities
To further capitalize the opportunity in the U.S. market, the memory giant has set up a new subsidiary in Indiana during Q3, after securing funding under the CHIPS Act for an advanced packaging production facility for AI memory in the U.S., according to ZDNet.
The Indiana facility is expected to begin mass production of next-generation HBM and other AI memory products in the second half of 2028, according to SK hynix’s press release.
China’s Revenue Share Dropped to low 20% Range
On the other hand, China, which once accounted for around 30% of SK hynix’s regional revenue, saw its share drop to just 24% in Q3, according to newdaily.
The scenario could be attributed to two reasons, according to the report. First, as its Chinese clients focus on PCs, smartphones, and IT devices that use general-purpose memory, and demand for these products has dwindled, China’s contribution to SK hynix’s total revenue seems to be fading.
In addition, the ongoing U.S. regulatory pressures on China have reportedly contributed to changes in SK hynix’s revenue structure.
A previous report by the Korea Economic Daily notes that SK hynix is accelerating the upgrade of its older DRAM lines in Wuxi, China, to advanced lines for producing fourth-generation 10-nanometer 1a DRAM. However, in some way, it is also struggling to modernize the facilities due to U.S. regulations, according to newdaily.
Read more
(Photo credit: SK hynix)