According to a report from Reuters on July 4, consensus from 27 analysts compiled by LSEG SmartEstimate indicates that driven by the surge in demand for AI technology and the resulting rebound in memory prices, Samsung Electronics’ operating profit for Q2 2024 (ending June 30) is projected to skyrocket by 1,213% from KRW 670 billion in the same period last year to KRW 8.8 trillion (roughly USD 6.34 billion), marking the highest since Q3 2022.

Other memory giants are also optimistic about the operation afterwards. Take Micron as an example. Regarding the AI frenzy, Micron CEO Sanjay Mehrotra claimed that in the data center sector, rapidly growing AI demand enabled the company to grow its revenue by over 50% on a sequential basis.”

Mehrotra is also confident that Micron can deliver a substantial revenue record in fiscal 2025, with significantly improved profitability underpinned by our ongoing portfolio shift to higher-margin products.

On the other hand, SK Group also stated that by 2026, the group will invest KRW 80 trillion in AI and semiconductors, while continuing to streamline its businesses to increase profitability and return value to shareholders.

Read more

• [News] SK Hynix to Invest USD 75 Billion in AI Push, with 80% of It Flooding into HBM
• [News] Memory Giant Micron’s 3Q24 Earnings Report Released, Outlook Slightly Better Than Expected

(Photo credit: Samsung)

According to a report from the Korean media outlet The Chosun Daily, Chinese company Huawei plans to collaborate with memory manufacturer Wuhan Xinxin Semiconductor Manufacturing Co. (XMC) to produce High Bandwidth Memory (HBM) semiconductors. Additionally, Jiangsu Changjiang Electronics Technology (JCET) and Tongfu Microelectronics, which are developing CoWoS advanced packaging technology, are also participating in the project.

CoWoS is a high-precision technology that integrates graphics processing units (GPUs) and HBM on a single substrate. This enhances computational performance, saves space, and reduces power consumption. Currently, the CoWoS technology developed by leading foundry TSMC is used in the production of AI chips for GPU giant NVIDIA.

In May 2023, according to another report from Reuters, China’s leading DRAM company CXMT (ChangXin Memory Technologies) collaborated with Tongfu Microelectronics to develop HBM chip samples. Additionally, tech media outlet The Information reported earlier that a series of Chinese companies, led by Huawei, plan to mass-produce HBM and increase China’s HBM output by 2026.

Furthermore, in March 2023, XMC announced the construction of an advanced HBM manufacturing plant, which is expected to produce 3,000 12-inch wafers per month.

The report further emphasizes that China is still in the early stages of HBM development. However, under the technological restrictions imposed by the United States in the semiconductor and artificial intelligence sectors, Huawei and a series of Chinese semiconductor companies’ move into HBM production has attracted close attention.

Currently, South Korean companies SK Hynix and Samsung Electronics control most of the global HBM market share, indicating that Huawei’s plan to develop HBM still has a long way to go.

Per TrendForce’s data, the three major HBM manufacturers held market shares are as follows: In 2023, SK Hynix and Samsung each held around 47.5%, while Micron’s share was roughly 5%. Still, forecasts indicate that SK Hynix’s market share in 2024 will increase to 52.5%, while Samsung’s will decrease to 42.4%.

Read more

• [News] Micron’s HBM Expansion at Full Throttle: Rumored to Expand in US, Malaysia Also an Option
• [News] XMC Initiates IPO Plan, Potentially Becoming China’s First HBM Foundry

(Photo credit: XMC)

On June 30, South Korea’s SK Group announced that its chip manufacturer, SK Hynix, will invest KRW 103 trillion (approximately USD 75 billion) by 2028 to enhance its chip business, with a particular focus on AI development.

According to a report from Commercial Times, SK Group recently concluded a two-day strategy meeting, after which it announced a full-scale effort to develop the AI capability, putting more emphasis on areas such as high-bandwidth memory (HBM), AI data centers, and AI voice assistants. SK Group further stated that 80% of the KRW 103 trillion, roughly KRW 82 trillion (USD 60 billion), will be dedicated to developing HBM.

HBM is widely used in generative AI chipsets, and SK Hynix is currently the exclusive supplier of HBM3 chips to NVIDIA. In the first quarter of this year, SK Hynix’s revenue more than doubled year-on-year to KRW 12.4 trillion, exceeding market expectations. Additionally, the company turned profit with an operating income of KRW 2.89 trillion, compared to a loss in the same period last year, primarily due to the high-margin HBM chips.

SK Group stated that by 2026, the group will invest KRW 80 trillion in AI and semiconductors, while continuing to streamline its businesses to increase profitability and return value to shareholders. Its plan to invest in AI chip development aligns with the South Korean government’s semiconductor policy.

As per a previous report from WeChat account DRAMeXchange, in January 2024, Korea launched the “World’s Largest and Best Semiconductor Supercluster Construction Plan,” proposing an investment of KRW 622 trillion (~USD 454 billion) by 2047, which is to build 16 new plants, inclusive of R&D facilities, and construct “Semiconductor Supercluster” in semiconductor-intensive cities such as Pyeongtaek, Hwaseong, Yongin, Icheon, and Suwon in southern Gyeonggi Province. It’s estimated that the chip production capacity will reach 7.7 million wafers per month by 2030.

According to another report from the Chosun Daily, starting from July, the South Korean government will also begin offering incentives and subsidies to semiconductor companies, launching a 26 trillion won (USD 19 billion) funding program to support the industry.

Read more

• [News] South Korea to Boost Semiconductor with a 26 Trillion Won Subsidy Program Starting in July
• [News] A Subsidy Wave Sweeping in the US, Europe and Japan amid the Cut-Throat Chip Competition

(Photo credit: SK Hynix)

According to a report from Korean media outlet Korea Economic Daily (KED), South Korean tech giant Samsung Electronics is looking to borrow up to KRW 5 trillion (approximately USD 3.6 billion) from the state-run Korea Development Bank (KDB) to finance its expansion of chip production facilities both in Korea and abroad.

According to sources cited in the same report, Samsung is in the final stages of negotiations with the KDB regarding the exact amount of the loan and the interest rates. Additionally, the report mentioned that Samsung’s competitor, SK Hynix, is also considering borrowing up to KRW 3 trillion from the KDB for its chip investments.

Regarding this, the bank is reportedly prepared to extend up to KRW 5 trillion to Samsung at an interest rate of about 3.5% per year. If finalized, this would be the first time in two decades that Samsung has borrowed such a large sum.

Notably, according to a previous report from the Chosun Daily, starting from July, the South Korean government will begin offering incentives and subsidies to semiconductor companies, launching a 26 trillion won (USD 19 billion) funding program to support the industry.

Initially, South Korea will start with an 18 trillion won (USD 12.94 billion) investment program, including preferential loans and investment funds. According to a statement from the Ministry of Economy and Finance, eligible companies will be able to borrow from a 17 trillion won low-interest loan program.

Read more

• [News] South Korea Reportedly Unveils USD 19 Billion Semiconductor Subsidy to Boost R&D and Infrastructure Investment
• [News] South Korea Reportedly Pushes for KRW 10 Trillion Investment Plan to Strengthen Semiconductor Industry Position

(Photo credit: Samsung)

After ending production cuts amidst a recovery in the memory industry, Kioxia disclosed its plans on the 3D NAND roadmap last week. According to reports from PC Watch and Blocks & Files, Kioxia stated that achieving a 1,000-layer level by 2027 would be possible.

According to the reports, the number of 3D NAND layers has generally increased from 24 in 2014 to 238 in 2022, representing a tenfold rise over eight years. Kioxia stated that achieving a 1,000-layer level by 2027 would be possible at a rate of increase of 1.33 times per year.

The Japanese memory chipmaker seems to be more ambitious than Samsung regarding the battle of layers. In May, Samsung revealed its target to release advanced NAND chips with over 1000 layers by 2030. According to Wccftech, the South Korean memory giant plans to apply new ferroelectric materials on the manufacturing of NAND to achieve this goal.

According to the latest analysis from TrendForce, Kioxia has benefited from the recovery of the memory industry, recently receiving subsidies from the Japanese government and additional financing from a consortium of banks. Furthermore, the company plans to launch an IPO by the end of the year. These measures have provided Kioxia with ample financial resources to pursue technological advancements and cost optimization.

TrendForce further notes that Kioxia has ambitious plans to achieve 1000-layer technology by 2027, which is the highest number of layers announced by any manufacturer so far. However, to reach the milestone, it will be necessary to transition from TLC (3 bits per cell) to QLC (4 bits per cell), and possibly even to PLC (5 bits per cell). The technical challenges involved are significant, and whether Kioxia can achieve this market milestone by 2027 remains to be seen.

The Battle of Layers between Memory Giants

Kioxia and its partner Western Digital showcased their 218-layer technology in 2023 following the 162-layer milestone. Its current announcement to achieve the 1000-layer technology by 2027 would be a huge leap from that.

The battle of layers between memory giants has been intensifying as other memory heavyweights had already surpassed the 200-layer milestone. Earlier in April, Samsung confirmed that it has begun mass production for its one-terabit (Tb) triple-level cell (TLC) 9th-generation vertical NAND (V-NAND), with the number of layers reaching 290, according an earlier report by The Korea Economic Daily. For now, the company aims to stack V-NAND to over 1000 layers by 2030.

SK Hynix unveiled the world’s highest-layer 321-layer NAND flash memory samples in August 2023, claiming to have become the industry’s first company developing NAND flash memory with over 300 layers, with plans for mass production by 2025. Micron has also started to mass produce its 232-layer QLC NANDs in 2024.

Uncertainties behind Kioxia’s Optimism

However, to Kioxia, there are more challenges to overcome, as technological obstacles and Western Digital’s stance add uncertainties to its ambition. According to the report from Blocks & Files, increasing density in a 3D NAND die involves more than just adding layers, as each layer’s edge must be exposed for memory cell electrical connectivity. This results in a staircase-like profile, and as the number of layers grows, the die area needed for the staircase expands as well.

Therefore, to increase density, it is necessary to shrink the cell size both vertically and laterally, and to raise the bit level as well. All these scaling factors, including layer counts, vertical cell size reduction, lateral cell size reduction, and cell bit level increases, present their own technological challenges.

Moreover, according to Blocks & Files, WD has concerns regarding the manufacturing capital costs and the return on investment from selling chips and SSDs made with the fabricated NAND dies.

Citing Western Digital EVP Robert Soderbery in June, the report noted that in the 3D era, NAND manufacturing requires higher capital intensity but offers a lower cost reduction as bit density increases. The company even described the situation as the “end of the layers race,” indicating that there would be a slowdown in the rate of NAND layer count increases to optimize capital deployment.

How long would the battle of layers continue, and how far would it go? Technological breakthroughs as well as the willingness to endure higher capital intensity while the cost reduction being relatively limited may be key.

Read more

• [News] NAND Flash Market Competition Intensifies, as SK Hynix, Samsung Strive to Meet AI Demand
• [News] With Memory Market Recovering, Kioxia Has Reportedly Ceased Production Cuts and Secured Bank Lending

(Photo credit: Kioxia)