Latest news with #HBM4
Korea Herald
6 days ago
- Business
- Korea Herald
SK hynix posts record quarterly profit on AI chip boom
Chipmaker eyes double HBM sales this year, with next-gen chips ready for Nvidia SK hynix, the world's top memory chip-maker by revenue, hit an all-time high quarterly operating profit of 9.2 trillion won ($6.73 billion) in the April-June period, thanks to soaring demand for its high bandwidth memory chips, a core component in AI processing. Reporting the second quarter's earnings, the company said it aims to double HBM sales and shipments this year compared to 2024, as well as increase its capital expenditure beyond its initial plans for rising HBM demand starting in 2026. The chipmaker reported that it has recorded 22.2 trillion won in sales in the second quarter, up 35.4 percent on-year. The operating profit also surged 68.5 percent over the same period, and net profit came in at 6.99 trillion won. Backed by strong earnings, SK hynix' cash holdings rose by 2.7 trillion won on-quarter to 17 trillion won. Its debt ratio stood at 25 percent, with net debt ratio at 6 percent, down 4.1 trillion won from the previous quarter. "We are on track to meet our goal as a full stack AI memory provider, satisfying customers and leading market expansion through the timely launch of products with best-in-class quality and performance required by the AI ecosystem," Song Hyun-jong, president and head of Corporate Center at SK hynix, said. "We will carry out part of the planned investments preemptively this year for a smooth delivery of major products with visible demand for next year, including HBM." The strong performance was driven by the full-scale ramp up of 12-layer HBM3E sales and increased NAND flash shipments across all applications. The company also attributed its recent success to an aggressive investment by global big tech companies into AI. "There are concerns about a potential demand slowdown in the second half (of the year), but major market fluctuations seem unlikely. We plan to focus operations on products with clear demand visibility," Kim Kyu-hyun, head of DRAM Marketing, said. While HBM4 involves significant technical upgrades — including expanded (input/output) for higher bandwidth, design changes for lower power consumption and the application of logic processes to the base die — SK hynix said it is factoring in the increased production costs as much as possible into its pricing strategy. "We aim to establish optimal pricing in collaboration with customers, while maintaining a healthy level of profitability," said Kim Ki-tae, SK hynix vice president and head of HBM sales and marketing. Regarding the latest US export controls possibly weakening the role of its Chinese manufacturing facilities, SK hynix emphasized that its China fabs will remain a core part of its global memory production strategy. "Shortage in legacy products, such as DDR4 and LPDDR4, are emerging across the industry, and we see our China fab playing a key role in meeting that demand," Song said. He also forecast that long-term demand for the legacy products would remain steady, particularly from Chinese smartphone makers. Capacity for older-generation DRAM chips has tightened in the past months as global production shifts toward HBM chips and newer DRAM standards like DDR5 and LPDDR5. Over Nvidia's plan to supply the H20 chips to China, SK hynix said it is ready to respond quickly if customer demand and supply conditions align. The company currently supplies 8-layer HBM3 — the previous-generation product — for the H20. SK hynix also plans to launch its 24Gb GDDR7 in the second half of the year, which is reportedly intended for Nvidia's upcoming RTX Pro AI accelerator targeting the Chinese market. Additionally, the company is focusing on strengthening its core DRAM technology, which underpins HBM. The company said it is developing next-generation technologies such as 3D DRAM and vertical gate architectures, and plans to begin transitioning to its sixth-generation 10-nanometer-class process in the second half of this year, with full-scale adoption scheduled for next year. In the NAND business, the company said it will take a cautious investment approach, prioritizing profitability and market demand, while continuing product development in anticipation of future market recovery. The company plans to expand sales of QLC-based high-capacity eSSDs and strengthen its product portfolio built on 321-layer NAND. Regarding its M15X fab in Cheongju, SK hynix said it plans to begin operations in the fourth quarter of this year, with mass production of next-generation HBM scheduled to start next year.
Korea Herald
6 days ago
- Business
- Korea Herald
SK hynix Q2 operating profit tops W9tr for 1st time on AI chip boom
South Korean chipmaking giant SK hynix Inc. said Thursday its second-quarter operating profit surpassed 9 trillion won ($6.53 billion) for the first time, driven by booming demand for artificial intelligence chips, including high bandwidth memory. In a regulatory filing, the company reported an operating profit of a record 9.21 trillion won for the April-June period, up 68.5 percent from a year ago, setting a new quarterly record. Revenue jumped 35.4 percent on-year to 22.23 trillion won, while net income soared 69.8 percent to 6.99 trillion won. Both operating profit and sales exceeded the previous all-time highs set in the fourth quarter of last year. SK hynix attributed the record-breaking performance to robust AI-related demand, solidifying its status as a world leader in HBM technology. "Aggressive investments by global big tech companies in AI led to a steady increase in demand for AI memory," the company said in a statement. "Shipments of both DRAM and NAND flash were higher than expected, helping the company log the best quarterly results in its history." It said sales of its 12-layer HBM3E products and NAND flash memory expanded in the second quarter, contributing to a positive earnings trend, led by its "industry-leading competitiveness in AI memory and profitability-first management discipline." SK hynix noted that the inventory level remained stable in the three-month period ending in June on increased memory orders and shipments of finished products. In the second half, demand for memory is expected to continue growing as major customers have plans to launch new products. The company also forecast stronger demand for high-performance and high-capacity memory chips amid intensifying global competition to enhance AI model inference capabilities. Ongoing investments by nations to build sovereign AI infrastructure are also expected to generate long-term memory demand, it added. To meet the growing need, SK hynix said it plans to double its HBM output this year, leveraging its production capabilities and outstanding performance of its products. It also said it will be ready to provide HBM4, the sixth-generation HBM, based on customer timelines to stay competitive in the AI memory race. In addition, SK hynix said some of this year's planned investments will be frontloaded to facilitate a smoother supply of key products, including HBM, in 2026. "We are on track to meet our goal as a 'full stack AI memory provider,' satisfying customers and leading the market expansion through the timely launch of products with best-in-class quality and performance required by the AI ecosystem," said Song Hyun-jong, president and head of the Corporate Center at SK hynix. (Yonhap)
Korea Herald
22-07-2025
- Business
- Korea Herald
Diverging prospects: Samsung eyes rebound, SK braces for HBM shakeup
As fears of HBM oversupply mount, intensifying price competition puts pressure on chipmakers, reshaping AI memory landscape As concerns over a potential supply glut in the high-bandwidth memory market for artificial intelligence semiconductors intensify, South Korea's two memory chip giants — Samsung Electronics and SK hynix — are seeing sharply divergent stock performances. According to the Korea Exchange on Tuesday, so far in July, Samsung Electronics' shares have surged 13.38 percent on the country's main bourse, Kospi, outpacing the broader index's 4.53 percent rise. On the contrary, SK hynix's shares have dropped 6.68 percent during the same period. Analysts say growing fears of oversupply and falling prices in the HBM segment, a key component in AI chipsets, are driving foreign investors to offload shares. This is particularly the case for those of SK, since it holds the No. 1 position in the global HBM market. Samsung's entry into the market of sixth-generation HBM chips, known as HBM4, is expected to erode the price premium previously enjoyed by SK hynix with its fifth-generation HBM3E products. 'There are rising concerns in the market about potential oversupply of HBM from this year and onward,' said Ryu Young-ho, a senior analyst at NH Investment & Securities. 'It has triggered increased selling pressure on SK hynix shares.' At the same time, Samsung Electronics' stock — long overshadowed by SK hynix — has begun to recover as the company secured supply deals for both HBM3 and HBM3E with AMD and Broadcom, signaling renewed confidence in its technological competitiveness. 'If Samsung succeeds in entering Nvidia's HBM supply chain, the oversupply issue could become even more pronounced,' Ryu said. Currently, SK dominates the global HBM market with a 53 percent share, followed by Samsung with 38 percent. With Micron joining the fray, competition is expected to intensify. Samsung shares are also benefiting from expectations of increased HBM revenue, further buoyed by the recent lifting of export restrictions on Nvidia's China-specific AI chip, the H20. With new market avenues opening, Samsung's momentum in the HBM space appears to be strengthening. As the market dynamic shifts, industry insiders are watching whether the HBM sector will transition from a technology-driven race to a price-driven war. Until recently, tight supply allowed suppliers to dictate prices. But as supply loosens, big tech clients like Nvidia and AMD are likely to gain leverage in price negotiations. 'The balance of power is shifting from suppliers to buyers,' said Ryu. 'We may see weaker-than-expected price hikes for the upcoming HBM4 chips.' Investment bank Goldman Sachs also forecast that HBM prices could fall by around 10 percent next year, citing the likely impact of increased competition and capacity. 'HBM has entered a maturing phase,' said an industry source who requested anonymity. 'As supply constraints ease, chip makers will need not only technical excellence but also strong price competitiveness to survive. The real price war is likely to begin in earnest next year.' Against this backdrop, both Samsung and SK are racing to mass-produce HBM4 by the second half of this year. SK was the first chip maker to supply 12-layer HBM4 samples to Nvidia in March. Samsung is expected to follow suit within this month, shipping its samples to both Nvidia and AMD. In an effort to regain lost ground after delays with HBM3E chips, Samsung is utilizing its advanced 1c DRAM technology, which employs a 10-nanometer process, in HBM4, aiming for high precision and yield stability. It is also actively investing in its Pyeongtaek Campus Line 4 (P4) to support volume production. 'Samsung appears to be rebuilding its strategy with a long-term perspective to win back customer trust, rather than focusing on short-term results,' said an anonymous source who is familiar with the matter. 'Though Samsung may be behind SK in HBM development timing, if it can deliver on performance, it still has a strong chance to catch up to its rivals.' SK, meanwhile, is prioritizing stable yields by using the same 1b, the fifth generation of the 10nm process and mass reflow-molded underfill packaging method from HBM3E. It is also deepening collaboration with Taiwan's TSMC to enhance both HBM4 production and advanced packaging capabilities. 'We are accelerating open collaboration with global customers as well as TSMC, not only to develop the highest-performance HBM4 but to reinforce our position as a total AI memory provider,' said Kim Joo-sun, SK hynix president in charge of AI infrastructure.
Straits Times
08-07-2025
- Business
- Straits Times
Samsung profit halves on US chip curbs, AI memory delays
Sign up now: Get ST's newsletters delivered to your inbox Samsung Electronics reported preliminary operating profit of 4.6 trillion won (S$4.3 billion) in the June quarter, a roughly 56 per cent drop from a year ago. SEOUL – Samsung Electronics' profit fell for the first time since 2023, hurt by US curbs on China-bound AI chips and hiccups in its plans to sell cutting-edge memory to Nvidia. South Korea's largest company reported preliminary operating profit of 4.6 trillion won (S$4.3 billion) in the June quarter, a roughly 56 per cent drop from a year ago. Analysts on average had projected a 41 per cent decline. Revenue stood at 74 trillion won. One-time inventory-related costs contributed to the drop, and customer evaluation and shipments of its advanced memory products are proceeding, Samsung said in a statement. Operating losses in its contract chipmaking business are expected to narrow in the second half of the year on a gradual recovery in demand, Samsung said. The company will provide a full financial statement with net income and divisional breakdowns later in July. Samsung has been struggling to regain its footing in high-bandwidth memory (HBM) chips, which are critical for powering Nvidia's AI accelerators. The company has yet to secure certification from Nvidia for its most advanced product – the 12-layer HBM3E – creating an unusually long lead time for rival SK Hynix in the highly lucrative space. Meanwhile, US competitor Micron Technology has been rapidly advancing to stake its own claim. Analysts polled by Bloomberg News prior to the preliminary earnings release expected Samsung's chip division to post an operating profit of 2.7 trillion won in the second quarter, up from 1.1 trillion in the prior quarter but still significantly lower than 6.5 trillion won a year earlier. In April, Samsung had signalled a better outlook, saying it shipped enhanced HBM3E samples to major customers and expected that product line to contribute to revenue in the second quarter. The company also said it plans to begin mass production of HBM4 chips in the second half of the year. Top stories Swipe. Select. Stay informed. World 25% on Japan and Malaysia, 40% on Laos: Trump's tariff letters to Asia add pressure for deals by Aug 1 Business US stocks knocked lower by tariff jitters; Musk's political plan hits Tesla World Netanyahu says has nominated Trump for Nobel Peace Prize Singapore Fastest charger to be added to Singapore's EV charging network by Q4 in 2025 Singapore Singapore's second mufti Sheikh Syed Isa Semait dies at age 87 Singapore Fewer marriages in Singapore in 2024; greater marital stability for recent unions Singapore Competition watchdog gives SIA, Malaysia Airlines conditional approval to continue cooperation Singapore Eligible S'poreans to get up to $850 in GSTV cash, up to $450 in MediSave top-ups in August Samsung is fighting to catch up to SK Hynix, which has aggressively positioned itself as Nvidia's primary HBM4 supplier. It shipped the world's first 12-layer HBM4 samples to customers ahead of schedule, followed by Micron in June, while Samsung has had to revise its 12-layer HBM3E design. Samsung secured an order from Advanced Micro Devices, joining Micron as a supplier, according to a June release. But its failure to win early certification for HBM3E chips from Nvidia – the dominant maker of AI-supporting graphics processing units – is hurting its attempts to take significant market share. Bernstein analysts led by Mark Li, who had previously expected Samsung's 12-layer HBM3E would be qualified by Nvidia in the second quarter, trimmed their forecast for Samsung's HBM market share, saying they now expect certification in the third quarter. 'Samsung will gradually narrow the gap vs rivals,' they wrote in a June 23 research note. 'We forecast SK Hynix remains the leader in 2027, but with others catching up and SK Hynix's edge eroding, the shares held by suppliers will be more similarly distributed then than now.' Bernstein estimates SK Hynix holds 57 per cent of the HBM market in 2025, followed by Samsung at 27 per cent and Micron at 16 per cent. BLOOMBERG
Business Times
08-07-2025
- Business
- Business Times
Samsung posts first profit drop since 2023 after AI chip delays
[SEOUL] Samsung Electronics' profit shrank more than expected after encountering hiccups in plans to sell cutting-edge artificial intelligence (AI) memory to Nvidia. South Korea's largest company reported preliminary operating profit of 4.6 trillion won (S$4.3 billion) in the June quarter, a roughly 56 per cent drop from a year ago and its first profit decline in more than a year. Analysts on average had projected a 41 per cent decline. Inventory-related costs contributed to the drop, Samsung said. Revenue stood at 74 trillion won. Samsung will provide a full financial statement with net income and divisional breakdowns later this month. Samsung has been struggling to regain its footing in high-bandwidth memory (HBM) chips, which are critical for powering Nvidia's AI accelerators. The company has yet to secure certification from Nvidia for its most advanced product, the 12-layer HBM3E, creating an unusually long lead time for rival SK Hynix in the highly lucrative space. Meanwhile, US competitor Micron Technology has been rapidly advancing to stake its own claim. Analysts polled by Bloomberg News prior to the preliminary earnings release expected Samsung's chip division to post an operating profit of 2.7 trillion won in the second quarter, up from 1.1 trillion in the prior quarter but still significantly lower than 6.5 trillion won a year earlier. In April, Samsung signalled a better outlook, saying it shipped enhanced HBM3E samples to major customers and expected that product line to contribute to revenue in the second quarter. The company also said it plans to begin mass production of HBM4 chips in the second half of the year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Samsung is fighting to catch up to SK Hynix, which has aggressively positioned itself as Nvidia's primary HBM4 supplier. It shipped the world's first 12-layer HBM4 samples to customers ahead of schedule, followed by Micron in June, while Samsung has had to revise its 12-layer HBM3E design. Samsung secured an order from Advanced Micro Devices, joining Micron as a supplier, according to a June release. But its failure to win early certification for HBM3E chips from Nvidia – the dominant maker of AI-supporting graphics processing units – is hurting its attempts to take significant market share. Bernstein analysts led by Mark Li, who had previously expected Samsung's 12-layer HBM3E would be qualified by Nvidia in the second quarter, trimmed their forecast for Samsung's HBM market share, saying they now expect certification in the third quarter. 'Samsung will gradually narrow the gap vs rivals,' they wrote in a Jun 23 research note. 'We forecast SK Hynix remains the leader in 2027, but with others catching up and SK Hynix's edge eroding, the shares held by suppliers will be more similarly distributed than now.' Bernstein estimates SK Hynix holds 57 per cent of the HBM market in 2025, followed by Samsung at 27 per cent and Micron at 16 per cent. At its annual shareholder meeting in March, Samsung vowed to strengthen its position in the HBM market this year, responding to concerns over its underperformance in AI. Jun Young-hyun, head of Samsung's chip business, said that Samsung's failure to secure an early lead in the HBM market contributed to it lagging behind rival SK Hynix and pledged not to repeat the mistake with HBM4. The next-generation memory is expected to be used in Nvidia's Rubin GPU architecture. 'While uncertainties remain around the timeline for quality certification, we see no indication of a strategy shift and believe the company is on track for a 3Q2025 market launch,' Daishin Securities analyst Ryu Hyung-keun wrote in a recent research report. BLOOMBERG
