Per a report by BusinessKorea, SK hynix Vice President Ryu Seong-su announced the company’s strategic plan in the HBM field during the SK Group Icheon Forum 2024 held on August 19. SK hynix plans to develop a product that boasts dozen of times the performance of existing HBM technologies.

The report indicates that SK hynix aims to develop a product with performance 20 to 30 times higher than current HBM offerings, achieving product differentiation.

During the forum, Ryu Seong-su emphasized that SK hynix will concentrate on leveraging advanced execution capabilities to provide memory solutions tailored for the AI (Artificial Intelligence) sector to meet the demands of the mass market.

• Seven Giants Proposed Customized Demands for HBM

Amid AI advancements, the demand for high-performance HBM has been on the rise, making it a hotspot among global high-tech companies.

According to Ryu Seong-su, Apple, Microsoft, Google Alphabet, Amazon, NVIDIA, Meta, and Tesla—seven of the world’s tech giants—have all engaged with SK hynix , seeking customized HBM solutions tailored to their specific needs.

Compared to existing HBM products, customized HBM offers clients more options in terms of PPA (Performance, Power, Area), thereby delivering more substantial value.

For example, Samsung believes that the power consumption and area of semiconductors can be largely reduced by stacking HBM memory with custom logic chips in a 3D configuration.

On this trend towards customization in the HBM sector, TrendForce predicted that HBM industry will become more customization-oriented in the future. Unlike other DRAM products, HBM will increasingly break away from the standard DRAM framework in terms of pricing and design, turning to more specialized production.

SK hynix CEO Kwak Noh-Jung also believes that as HBM4 continues to advance, the demand for customization will grow, which is likely to become a global trend and shift towards a more contract-based model. Moreover, it is expected to mitigate the risk of oversupply in the memory market.

In fact, HBM market is gradually evolving from a “general-purpose” to a “customization-oriented” market with the rise of AI. Later, as breakthroughs are made in speed, capacity, power consumption, and cost, HBM is poised to play an even more critical role in the AI sector.

• Customized HBM to Become a Reality in the HBM4 Generation

Currently, buyers have already begun making customized requests for HBM4, and both SK hynix and Samsung Electronics have developed strategies to address these demands.

SK hynix has been in collaboration with TSMC to develop the sixth generation of HBM products, known as HBM4, which is expected to enter production in 2026.

Unlike previous generations, inclusive of the fifth-generation HBM3E, which were based on SK hynix’s own process technology, HBM4 will leverage TSMC’s advanced logic process, which is anticipated to significantly enhance the performance of HBM products.

Additionally, adopting ultra-fine processing technology for the base die could enable the addition of more features.

SK hynix has stated that with these two major technological upgrades, the company plans to produce HBM products that excel in performance and efficiency, thereby meeting the demand for customized HBM solutions.

Ryu Seong-su believes that as customized products enjoy burgeoning growth, memory industry is approaching a critical point of paradigm shift, and SK hynix will continue to make advantage of the opportunities presented by these changes to advance its memory business.

Meanwhile, Samsung Electronics, as a leading IDM semiconductor company with capabilities in wafer foundry, memory, and packaging, is also actively promoting customized HBM AI solutions.

In July 2024, Choi Jang-seok, head of the new business planning group at Samsung Electronics’ memory division, stated at the “Samsung Foundry Forum” that the company intends to develop a variety of customized HBM memory products for the HBM4 generation and announced collaborations with major clients like AMD and Apple.

Choi Jang-seok pointed out that the HBM architecture is undergoing profound changes, with many customers shifting from traditional general-purpose HBM to customized products. Samsung Electronics believes that customized HBM will become a reality in the HBM4 generation.

Read more

• [News] Samsung Reportedly to Tape out HBM4 with 1c DRAM by Year-end
• [News] SK hynix CEO: Demand for Memory Chips to Remain Robust until 1H25, Driven by HBM

(Photo credit: Micron)

Earlier in July, ASML CEO Christophe Fouquet noted that though China’s progress on cutting-edge chips is ten years behind the U.S., the world is in need of the legacy chips it manufactured. Now it seems that in order to become “the world’s factory,” China has to turn itself into “the world’s market” first.

And it has already been doing so. Over 40% of major semiconductor equipment manufacturers’ revenue in the second quarter of 2024, including that of Applied Materials, ASML and Tokyo Electron, came from China. In addition, another report by Maeli Business Newspaper highlights that Samsung Electronics and SK hynix also saw their sales in China double in the first half of this year.

Samsung’s Revenue from China Doubled in 1H24, Mainly Boosted by Semiconductors

Citing comments from Analysts, the report attributes China’s strong demand for Korean semiconductors to the country’s aggressive economic stimulus measures and the surge in AI, coinciding with the semiconductor upturn.

Citing Samsung’s semi-annual report on the 22nd, the report notes that its sales in China soared to KRW 32.3452 trillion (around USD 24.2 billion) in the first half of 2024, doubling from KRW 17.808 trillion in the first half of last year. According to Samsung’s website, China accounted for 17% of its revenue in the second quarter of 2024, rising from 11% in 2Q23.

The sales figures for China reported by Samsung encompass not only its flagship semiconductor products but also others like smartphones and home appliances. However, it is worth noting that unlike the situation in the U.S. and Europe, where the revenue structure is more diversified, semiconductors are believed to constitute the majority of sales in China, the report suggests.

HBM May Be a Major Contributor of South Korean Memory Giants’ Soaring Revenue in China

The soaring revenue in China echoes with the rumor that the U.S. is reportedly mulling new measures to limit China’s access to AI memory, an arena South Korean memory giants excel at. A previous report by Reuters noted that as the restrictions might be imposed as early as late August, Chinese tech giants like Huawei and Baidu, along with other startups, are said to be stockpiling high bandwidth memory (HBM) semiconductors from Samsung Electronics.

Citing a source from the semiconductor industry, Maeli states that the rapid growth of HBM is driving a significant shift in China’s DRAM market. The surging demand, derived from the need for server and enterprise PC upgrades as well as the launch of new AI-equipped PCs, appears to have boosted sales in China, benefiting South Korean memory giants.

The current HBM market leader, SK hynix, currently operates a DRAM plant in Wuxi, a packaging facility in Chongqing, and a NAND plant acquired from Intel in Dalian. Its sales in China in 1H24, according to the report, is estimated to amount to KRW 8.6061 trillion (around USD 6.4 billion), more than doubling its sales from the same period last year (KRW 3.8821 trillion).

The report, citing SK hynix’s semi-annual report, notes that the sales and net profit of SK hynix Semiconductor China in 1H24 were KRW 2.6624 trillion and KRW 119.4 billion, respectively. In the same period last year, it reported a loss of KRW 165.6 billion.

Read more

• [News] ASML Claims the World Counts on China for Legacy Chips; So Do Chip Equipment Giants
• [News] Chinese Tech Giants Reportedly Stockpile Samsung’s HBM ahead of Potential U.S. Restrictions

(Photo credit: Samsung)

Per Korean media theElec on August 19, Samsung Electronics is considering outsourcing part of its Micro LED display production to a third party including China-based MTC.

According to industry sources cited by Korean media, Samsung is currently evaluating the possibility of outsourcing production due to cost considerations, particularly for the low-end Micro LED display targeting markets like India and the Middle East.

Industry sources further reveal that the proportion of outsourced orders is expected to account for 20-30% of Samsung’s total Micro LED display products.

It’s reported that Samsung mainly provides Micro LED display for residential and commercial applications. In TV market, Samsung purchased Micro LED chips from San’an and PlayNitride.

After these chips are placed on substrate, transferred and packaged, Samsung directly handles other processes. For low-end products, the majority of current Micro LED production is done by itself, with only a small portion outsourced.

Technically, Samsung’s latest Micro LED TV uses LTPS TFT (Low-Temperature Polycrystalline Silicon Thin-Film Transistor) technology, while its commercial Micro LED display is still based on PCB technology.

The report suggested that if Samsung outsources the production of commercial Micro LED modules to manufacturers like MTC, they would assemble them for Samsung using PCBA (Printed Circuit Board Assembly) methods.

Given that companies like MTC in China have improved their Micro LED module technology, Samsung believes there is no significant difference between outsourcing production and completing the related module processes in-house.

Moreover, it could reduce production cost. If cooperates with MTC, Samsung expects Micro LED production cost to potentially decrease by 5-10%.

Besides cost reduction, Korean media point out that Samsung’s consideration of outsourcing low-end product production could allow it to focus on Micro LED module bonding and seamless technology, which are closely related to semiconductor manufacturing processes.

Industry sources highlight that the bonding and seamless technology of Micro LED modules are more critical, as these processes determine the final quality of Micro LED, despite the highly overlapping supply chains of Micro LED chips among manufacturers.

In fact, Samsung’s plan to reduce Micro LED cost has long been an open secret within the industry. As per Korean media reports in July, Samsung has already initiated its cost reduction plan and is currently working with relevant partners to push this project forward.

However, it’s worth noting that the potential partner mentioned by Korean media is BMTC. According to information from LEDinside, MTC’s LED business includes two downstream subsidiaries: VMTC and BMTC.

The former focuses on COB fine-pitch display business, while the latter on SMD LED packaging, backlighting, and lighting. If Samsung were to collaborate with MTC on Micro LED manufacturing, the corresponding products would theoretically be VMTC’s COB modules.

Currently, no official confirmation is disclosed, and the actual situation remains to be verified.

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• [News] iPhone 16 OLED Panel Suppliers Samsung and LGD Speed Up Production Ahead of September Launch
• [News] Samsung Gains Early Market Entry Advantage in the Panel-Level Packaging Sector Ahead of TSMC

(Photo credit: Samsung)

China has long been the preferred location for tech companies to establish their supply chains. However, in recent years, the decline in population dividends has led to rising labor costs, and the need for tech companies to mitigate the impact of geopolitical risks has prompted them to accelerate the relocation of supply chains out of China, with some shifting production capacity to Southeast Asia and South Asia.

Recently, as per a report from TechNews citing sources, it’s indicated that HP is considering moving more than half of its personal computer production away from China to countries like Thailand and Vietnam.

This move is primarily aimed at significantly reducing its reliance on China’s supply chain, as well as addressing global trade dynamics and the need to lower costs.

In addition to HP, several well-known tech companies are also shifting their supply chains to Southeast Asian and South Asian countries.

• Apple

One notable example of supply chain relocation is Apple. Having long relied on China’s supply chain, Apple is now finding that the era of full dependence on China is coming to an end due to political and commercial pressures.

iPhone

As one of Apple’s most important products, iPhone has been a key focus in this shift.

Although supply chain diversification was always part of Apple’s strategy, the plan has been accelerated following a series of disruptions at Foxconn’s Zhengzhou plant during the pandemic. These events have compelled Apple to expedite its efforts to diversify its supply chain.

According to a report from Business Standard, since April of this year, Apple has assembled iPhones worth USD 14 billion in India, with 14% of iPhones now being manufactured there.

Rajeev Chandrasekhar, India’s former Union Minister of State for Electronics and Information Technology, also stated on the X platform that by 2028, it is estimated that up to 25% of iPhones will be made in India.

iPad

In addition to iPhone, Apple has also started shifting part of its iPad production to Vietnam. Foxconn is responsible for manufacturing iPads in Vietnam, where mass production and shipments are already underway.

MacBook

Similarly, the MacBook production line has been partially moved out of China and relocated to Vietnam, which is primarily produced by Quanta and Foxconn in their Vietnamese facilities.

Earlier rumors cited by Nikkei have suggested that Apple was considering shifting some of its production to Thailand as well. However, Thailand’s supply chain for key components is not yet fully developed, with many parts still reliant on imports from China.

The associated transportation costs and the risk of potential damage during transit have led Apple to prioritize setting up production lines in Vietnam first.

Nevertheless, Thailand’s strong electronics manufacturing infrastructure and cost advantages make it a potential future production site for Apple.

According to a report from South Korean media outlet BusinessKorea citing sources, Samsung Electronics is said to be planning to reduce its procurement of ASML’s next-generation Extreme Ultraviolet (EUV) lithography equipment. Additionally, their joint plan to build a research and development center in South Korea may also in limbo.

Reportedly, Samsung Electronics initially planned to purchase more than three units of the next versions, EXE:5200, EXE:5400, and EXE:5600, over the next ten years. However, the company has now decided to introduce only the EXE:5200 and will reconsider the introduction of subsequent versions in the future.

This decision came after Vice Chairman Jun Young-hyun was appointed as the new head of the DS (Device Solutions) division and reviewed ongoing projects and investments.

Samsung and ASML’s strategic partnership originated from a visit in December last year, when President Yoon Suk Yeol led a delegation to ASML’s headquarters in the Netherlands. The delegation included representatives from South Korean semiconductor giants Samsung and SK hynix, according to the Korea Times.

During the visit, Samsung and ASML signed an MOU, agreeing to jointly invest approximately KRW 1 trillion (about USD 7.6 billion) to establish a research fab in South Korea.

However, with Samsung’s decision to reduce equipment introduction, the related process has been completely halted. It remains to be seen whether the joint research center will be established in another location or if the project itself will be canceled, pending future discussions.

Kyung Kye-hyun, who was the head of the DS division at the time and is now leading the Future Business Planning Team and SAIT (Samsung Advanced Institute of Technology), emphasized the importance of establishing a cooperative relationship through joint research for High NA EUV.

He noted that Samsung now has a technical priority for “High NA EUV” and mentioned that the company believes it has created an opportunity to utilize High NA EUV effectively in DRAM or logic semiconductors in the long term.

Despite the revised plans, as per Business Korea citing a Samsung Electronics official, it pointed out that there is no change in the plan to introduce ASML High NA EUV equipment and assured that the R&D center of the two companies will still be established in the optimal location.

Read more

• [News] Samsung Reportedly to Bring in High-NA EUV Machine as soon as Year-End, as SK hynix Targets 2026
• [News] Samsung, ASML Invest KRW 1 Trillion in Korean Research Fab as Netherlands-Korea Semiconductor Alliance Formed

(Photo credit: 대한민국 대통령실)