Nvidia supplier SK Hynix says HBM chips are almost sold out for 2025

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Nvidia supplier SK Hynix says HBM chips are almost sold out for 2025
Nvidia supplier SK Hynix says HBM chips are almost sold out for 2025

South Korea’s SK Hynix said on Thursday that its high-bandwidth memory (HBM) chips used in AI chipsets were sold out this year and will be nearly sold out by 2025 as enterprises quickly expand artificial intelligence services.

South Korea’s SK Hynix (000660.KS) said on Thursday that its high-bandwidth memory (HBM) chips used in AI chipsets were sold out this year and nearly sold out in 2025 as firms rapidly expanded artificial intelligence services.

Nvidia (NVDA.O), the world’s second-largest memory chipmaker, will begin sending samples of its latest HBM chip, the 12-layer HBM3E, in May, with mass production beginning in the third quarter.

“The HBM market is expected to continue to grow as data and AI model sizes increase,” Chief Executive Officer Kwak Noh-Jung stated at a conference. “Annual demand growth is expected to be about 60% in the mid-to-long term.”

According to analysts, SK Hynix, which competes with US rival Micron (MU.O.), opens a new tab, and domestic behemoth Samsung Electronics (005930.KS), which opens a new tab in HBM, was Nvidia’s sole supplier of HBM chips until March. Major AI chip purchasers are keen to diversify their suppliers to better maintain operating margins. Nvidia controls over 80% of the AI processor industry.

Micron has also stated that its HBM chips are sold out for 2024 and that the majority of its 2025 supply has already been reserved. In March, it aims to give customers samples of its 12-layer HBM3E chips.

Samsung Electronics (005930.KS), which aims to manufacture its HBM3E 12-layer chips in the second quarter, announced this week that this year’s HBM chip shipments are likely to increase more than thrice and that it has finalized supply discussions with clients. It did not go into additional detail.

Last month, SK Hynix revealed a $3.87 billion proposal to develop an advanced chip packaging plant in the United States’ state of Indiana with an HBM chip line, as well as a 5.3 trillion won ($3.9 billion) investment in a new DRAM chip factory at home with an emphasis on HBM chips.

Kwak stated that investment in HBM differed from previous trends in the memory chip sector in that capacity was raised after determining demand first.

In a post-earnings conference call last week, SK Hynix stated there could be a shortfall of standard memory chips for smartphones, personal computers, and network servers by the end of the year if demand for digital devices surpasses estimates.

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