The recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices, remaining stable for two consecutive months. However, the rapid growth in demand for High Bandwidth Memory (HBM), essential for data center servers and generative AI, is expected to boost future DRAM prices as the production trend of HBM rises.

The Nikkei News reported on May 18th that the recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices used in smartphones, PCs, and data center servers for temporary data storage.

In April 2024, the wholesale price (bulk transaction price) of the benchmark product DDR4 8Gb was around USD 1.95 per unit, and the price of the smaller capacity 4Gb product was around USD 1.50 per unit, both remaining unchanged from the previous month (March 2024) and marking the second consecutive month of stability.

As of February 2024, DRAM prices had risen for four consecutive months. DRAM wholesale prices are negotiated between memory manufacturers and customers monthly or quarterly. Reportedly, approximately 50% of DRAM demand comes from PCs and servers, while around 35% comes from smartphones.

The report indicated that the demand for HBM, essential for generative AI, is rapidly increasing, and market expectations for the production trend of HBM are expected to boost future DRAM price increases.

A source cited in the report, which is an Electronic product trader, noted that some major manufacturers have accepted the memory manufacturers’ price hike requests. A PC manufacturer source cited by the report also stated that DRAM wholesale prices from April to June are expected to rise by 5-10% compared to January to March.

Another source cited by the report stated that the facilities required to produce HBM are approximately three times larger than those needed for producing general DRAM. If HBM production increases, the production volume of other DRAMs will decrease, thereby driving up prices. Another source cited in the report stated that supply cannot keep up with demand, and pricing power is currently in the hands of memory manufacturers.

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• [News] Samsung and SK Hynix Urgently Reallocate 20% of DRAM Production Capacity to Support Rising HBM demand
• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement

(Photo credit: SK Hynix)

SK Hynix has reportedly decided to sell the subsidiary equipment of its Chinese manufacturing plant to an investment company owned by the Wuxi Municipal Government, leading to speculation that SK Hynix may be withdrawing from its Chinese manufacturing business.

According to reports from The Korea Economy Daily and Reuters, industry sources have revealed that SK Hynix’s subsidiary, SK Hynix System IC, which operates 8-inch wafer manufacturing, recently held a board meeting and decided to sell a 21.3% stake in SK Hynix System IC (Wuxi) for KRW 205.4 billion (roughly USD 150.8 million) to Wuxi Industry Development Group.

Additionally, as per the Reuter’s report, SK Hynix System IC said it will also sell its intangible assets, including process technology to its Wuxi unit for KRW 123.8 billion.

The sources cited by The Korea Economy Daily‘s report have revealed that Wuxi Industry Development Group has additionally issued new shares to acquire a 28.6% stake, indicating that SK hynix is highly likely to sell nearly 50% of its shares.

Just in March, per a report from Chosun Daily, SK Hynix planned the closure of its Shanghai-based company established in 2006, shifting its focus to Wuxi, where its semiconductor manufacturing plant is located, making it the new business hub in China. However, this recent withdrawal suggests that SK hynix may be considering a complete exit from the Chinese semiconductor foundry market.

SK Hynix’s decision to downsize its Chinese foundry business comes amid a worsening semiconductor market, compounded by aggressive capacity expansions by domestic companies, making it difficult to maintain competitiveness. Additionally, China is actively expanding its 8-inch wafer plants to counter US export restrictions and is heavily investing in nurturing leading domestic foundry enterprises such as SMIC and Hua Hong Semiconductor.

As per data from the National Bureau of Statistics of China, semiconductor capacity in China surged by 40% in the first quarter, with SMIC’s overall capacity increasing by over 12%, despite a slowdown in foundry demand.

Read more

• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement
• [News] Increasing HBM Capacity to Sustain Market Share, SK Hynix Rumored to Upgrade Wuxi Plant

(Photo credit: SK Hynix)

The surge in memory product prices continues, driven by the AI wave revitalizing the memory market. According to a report from Liberty Times Net, prices of high-performance DRAM are also on the rise. Industry sources cited by the same report have indicated that SK Hynix’s LPDDR5/LPDDR4/DDR5 and other DRAM products will see a comprehensive price hike of 15-20%.

According to a report from Chinese media Wallstreetcn, it has cited industry sources, noting that SK Hynix’s DRAM product prices have been steadily increasing month by month since the fourth quarter of last year, with cumulative increases ranging from approximately 60% to 100%. This upward trend in memory prices is expected to continue until the second half of the year.

On April 25th, SK Hynix announced its first-quarter financial results, with revenue soaring to KRW 12.42 trillion, marking a staggering 144.3% increase compared to the same period last year. Operating profit reached KRW 2.88 trillion, far exceeding market expectations of KRW 1.8 trillion, and achieving the second-highest historical figure for the same period.

Contrasting with the loss of KRW 3.4 trillion in the same period last year, this performance represents a significant turnaround for SK Hynix, signaling a shift from a prolonged period of stagnation to comprehensive recovery.

Looking ahead, SK Hynix expressed optimism, stating that the growing demand for memory driven by AI and the recovery of demand for general DRAM products starting from the second half of this year will contribute to a stable growth trend in the memory market for the rest of the year.

Industry sources cited by the report predict that as demand for high-end products like HBM increases, requiring larger capacity compared to general DRAM products, the increase in output of high-end products will lead to a relative decrease in supply of general DRAM products. Consequently, both suppliers and clients are expected to deplete their inventories.

In line with the trend of growing memory demand for AI applications, SK Hynix has decided to ramp up the production of its HBM3e products, which began global production in March this year, and expand its customer base. Additionally, the company plans to launch its fifth-generation 10-nanometer class (1b) 32Gb DDR5 DRAM products within this year, aiming to strengthen its market leadership in high-capacity DRAM products for servers.

Read more

• [News] HBM Craze Continues! SK Hynix Reports Sold Out for this Year, Next Year’s HBM Capacity Nearly Fully Booked
• [News] HBM Boosts SK Hynix’s Q1 Revenue to Record High, 734% Jump in Operating Profit QoQ

(Photo credit: SK Hynix)

According to South Korean media outlet BusinessKorea’s report on May 2nd, NVIDIA is reported to be fueling competition between Samsung Electronics and SK Hynix, possibly in an attempt to lower the prices of High Bandwidth Memory (HBM).

The report on May 2nd has cited sources, indicating that the prices of the third-generation “HBM3 DRAM” have soared more than fivefold since 2023. For NVIDIA, the significant increase in the pricing of critical component HBM is bound to affect research and development costs.

The report from BusinessKorea thus accused that NVIDIA is intentionally leaking information to fan current and potential suppliers to compete against each other, aiming to lower HBM prices. On April 25th, SK Group Chairman Chey Tae-won traveled to Silicon Valley to meet with NVIDIA CEO Jensen Huang, potentially related to these strategies.

Although NVIDIA has been testing Samsung’s industry-leading 12-layer stacked HBM3e for over a month, it has yet to indicate willingness to collaborate. BusinessKorea’s report has cited sources, suggesting this is a strategic move aimed at motivate Samsung Electronics. Samsung only recently announced that it will commence mass production of 12-layer stacked HBM3e starting from the second quarter.

SK Hynix CEO Kwak Noh-Jung announced on May 2nd that the company’s HBM capacity for 2024 has already been fully sold out, and 2025’s capacity is also nearly sold out.  He mentioned that samples of the 12-layer stacked HBM3e will be sent out in May, with mass production expected to begin in the third quarter.

Kwak Noh-Jung further pointed out that although AI is currently primarily centered around data centers, it is expected to rapidly expand to on-device AI applications in smartphones, PCs, cars, and other end devices in the future. Consequently, the demand for memory specialized for AI, characterized by “ultra-fast, high-capacity and low-power,” is expected to skyrocket.

Kwak Noh-Jung also addressed that SK Hynix possesses industry-leading technological capabilities in various product areas such as HBM, TSV-based high-capacity DRAM, and high-performance eSSD. In the future, SK Hynix looks to provide globally top-tier memory solutions tailored to customers’ needs through strategic partnerships with global collaborators.

Read more

• [News] HBM Craze Continues! SK Hynix Reports Sold Out for this Year, Next Year’s HBM Capacity Nearly Fully Booked
• [News] Aiming at AI Opportunities SK Hynix to Build New Plant for HBM Capacity Expansion

(Photo credit: SK Hynix)

SK Hynix CEO Kwak Noh-Jung announced on May 2nd that the company’s HBM capacity for this year has already been fully sold out, and next year’s capacity is also nearly sold out. From a technological perspective, SK Hynix plans to provide samples of the world’s highest-performance 12-layer stacked HBM3e products in May this year and is preparing for mass production starting in the third quarter.

SK Hynix just held a press conference in South Korea, where they disclosed information regarding their AI memory technology capabilities, market status, and investment plans for future major production sites in Cheongju and Yongin, South Korea, as well as in the United States.

Kwak Noh-Jung pointed out that although AI is currently primarily centered around data centers, it is expected to rapidly expand to on-device AI applications in smartphones, PCs, cars, and other end devices in the future. Consequently, the demand for memory specialized for AI, characterized by “ultra-fast, high-capacity and low-power,” is expected to skyrocket.

Kwak Noh-Jung stated that SK Hynix possesses industry-leading technological capabilities in various product areas such as HBM, TSV-based high-capacity DRAM, and high-performance eSSD. In the future, SK Hynix looks to provide globally top-tier memory solutions tailored to customers’ needs through strategic partnerships with global collaborators.

Looking ahead to AI memory, SK Hynix President Justin Kim pointed out that as we enter the era of AI, the global volume of data generated is expected to grow from 15 Zettabytes (ZB) in 2014 to 660 ZB by 2030. Simultaneously, the proportion of revenue from AI memory is also expected to increase significantly. Memory technologies oriented towards AI, such as HBM and high-capacity DRAM modules, are projected to account for about 5% of the entire memory market in 2023 (in terms of revenue), with expectations to reach 61% by 2028.

Additionally, the company will advance collaboration with top-tier partners in the system semiconductor and foundry fields globally, aiming to timely develop and provide the best products.

Regarding SK Hynix’s packaging technology capabilities, the company highlighted its MR-MUF technology as one of its core packaging technologies. While there may be bottlenecks in high-layer stacking, SK Hynix emphasized that this is not the case in practice. The company has already begun mass production of 12-layer stacked HBM3 products using advanced MR-MUF technology.

Reducing the pressure on chip stacking to 6% has not only shortened process time but also increased production efficiency by up to 4 times while enhancing heat dissipation by 45%. Moreover, the latest MR-MUF technology from SK Hynix utilizes new protective materials, resulting in a 10% improvement in heat dissipation. Additionally, the advanced MR-MUF technology employs superior high-temperature/low-pressure methods for warpage control, making it the most suitable solution for high-layer stacking.

Furthermore, SK Hynix plans to adopt advanced MR-MUF technology in HBM4 to achieve 16-layer stacking and is actively researching hybrid bonding technology. Lastly, in terms of investments in the United States, SK Hynix has confirmed the construction of an advanced packaging production facility for AI memory in Indiana. This facility is scheduled to commence mass production of the next-generation HBM products in the second half of 2028.

Read more

• [News] Aiming at AI Opportunities SK Hynix to Build New Plant for HBM Capacity Expansion
• [News] SK Hynix Partners with TSMC to Strengthen HBM Technological Leadership

(Photo credit: SK Hynix)