High Bandwidth Matchup
Industry predictions suggest Samsung Electronics will significantly expand its High Bandwidth Memory (HBM) production capabilities with substantial equipment investment. This intensifies the industry leadership competition with SK hynix, which is entering mass production of its fifth-generation HBM3E product in the first half of this year.
As of Jan. 23, it’s estimated that SK hynix recorded over 1 trillion won in sales from HBM in the last quarter of the previous year, a first in history. The HBM market size last year reached around US$4 billion, with SK hynix solidifying its lead with a market share in the 20 percent range.
Furthermore, SK hynix plans to start mass production of the next-generation HBM3E in the first half of this year, strengthening its leadership in the global semiconductor component market’s high-value-added product line. Earlier this year at CES 2024 in Las Vegas in the U.S., SK hynix President Kwak No-jung expressed confidence in the company’s business, stating, “SK hynix is the clear leader in the HBM market.”
On the other hand, Samsung Electronics, which began expanding its fourth-generation HBM3 supply from the fourth quarter of last year, is entering a transitional period where related sales start significantly reflecting in its performance. However, Samsung Electronics is expected to embark on massive equipment investment to enhance its overall product production capabilities to accelerate its pursuit.
The crucial battleground between the two companies is predicted to be HBM3E. HBM3E is slated to be installed in next-generation AI chips sold by Nvidia in the second half of next year, and both Samsung Electronics and SK hynix are expected to fiercely compete to secure supply orders for this purpose.
SK hynix, which started developing HBM with Nvidia since 2013 and has accumulated a decade of production know-how, is also seen as having a competitive advantage in terms of pricing. SK hynix successfully developed HBM3E in August last year and is currently undergoing performance verification procedures by supplying samples to major clients, including Nvidia.
Samsung Electronics still has opportunities for a turnaround. The company plans to increase its maximum HBM production to between 150,000 and 170,000 units per month by the fourth quarter of this year.
Additionally, Samsung Electronics continues aggressive investments. Han Jin-man, vice president of Samsung Electronics’ DS Division in America, recently stated to reporters, “This year, we increased our HBM CAPEX by more than 2.5 times, and despite the challenging investment capacity of memory manufacturers, Samsung is expected to maintain this level next year.”