Reuters has highlighted SK Hynix's achievements in the artificial intelligence (AI) semiconductor market, noting that long-term investments in high-bandwidth memory (HBM), once considered a niche product, have transformed the company's standing.
On June 24, Reuters reported that "SK Hynix has surpassed Samsung Electronics to become the top company by market capitalization on the domestic stock exchange, thanks to over a decade of investment in HBM."
When SK Group acquired Hynix in 2012, many viewed the decision as risky. However, the company's early lead in HBM has coincided with a surge in demand for AI semiconductors.
HBM is a type of memory semiconductor that stacks multiple DRAM chips vertically to enhance data processing speeds. Initially categorized as a product not widely used by data center customers, it has now become an essential component for AI accelerators, leading to a dramatic increase in demand.
In 2014, SK Hynix launched the world's first HBM product in collaboration with AMD. However, the company faced setbacks with its second-generation HBM products, falling behind Samsung Electronics in the late 2010s. Internally, discussions arose about whether to halt HBM development.
Instead of withdrawing, SK Hynix opted for additional investments, anticipating a rise in demand from Nvidia. The company invested 880 billion won in expanding its packaging facilities in Icheon and other locations.
Initially, these investments proved burdensome. In 2019, demand from Nvidia and cryptocurrency mining companies declined, leading to lower utilization rates at these facilities.
Shin Dae-yong, a former SK Hynix executive who led HBM development, told Reuters, "In 2019, it was a headache; it seemed useless at the time."
A turning point came in 2022 with the launch of OpenAI's ChatGPT. The surge in generative AI led to a significant increase in demand for Nvidia's AI accelerators, which in turn boosted the need for HBM.
Reuters noted that "SK Hynix was already prepared in terms of performance and production capacity, and it has now established itself as a key HBM supplier for Nvidia."
HBM has become a stepping stone for SK Hynix to quickly recover from a downturn in the memory market. Despite reporting an annual operating loss of 7.73 trillion won in 2023 due to a sharp decline in memory prices, the company is projected to achieve record operating profits in 2024. In 2025, it even briefly held the title of the world's top DRAM producer.
Samsung Electronics is currently pursuing a stronger position in the HBM market. Reuters explained, "While Samsung produces the base chips used in HBM in-house, SK Hynix is collaborating with TSMC to enhance performance starting with the next-generation HBM4."
* This article has been translated by AI.
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