SK Hynix has confirmed its high-bandwidth memory (HBM) chips have sold out for this year and are almost sold out for 2025.
HBM chips are a critical component in AI chips as they provide faster processing speeds and reduced power consumption, compared to traditional memory chips.
SK Hynix is the world’s second-largest memory chipmaker and the primary supplier of HBM to Nvidia for the chip designers’ GPUs.
"The HBM market is expected to continue to grow as data and [AI] model sizes increase," said the company’s CEO, Kwak Noh-Jung, in comments reported by Reuters. "Annual demand growth is expected to be about 60 percent in the mid-to-long-term."
The news comes a week after SK Hynix announced its first profitable quarter since 2022, with the company recording a net profit of 1.92 trillion South Korean won ($1.39 billion) in the first quarter of 2024.
In a statement released when the results were published, the company said the demand for AI memory technology in addition to increased sales of enterprise solid state drives (eSSD) for use in on-premises AI data centers had helped to boost the company’s DRAM and NAND businesses.
To meet this growing demand, throughout April, SK Hynix announced it would be investing billions of dollars into the construction of fabs in West Lafayette, Indiana, and Cheongju, South Korea, to boost the company’s HBM and Dynamic Random Access Memory (DRAM) chip production capabilities.
The Cheongju fab has an expected completion date of November 2025, while mass production at the West Lafayette plant is slated for the second half of 2028.
In April, the company also signed a memorandum of understanding with TSMC that will see SK Hynix adopt TSMC’s foundry processes to develop HBM4, which is expected to go into production in 2026, to improve the performance and power efficiency of the memory chips.
Commenting on the partnership at the time of its announcement, Justin Kim, president and head of AI Infra, at SK Hynix, said: "With this cooperation in place, we will strengthen our market leadership as the total AI memory provider further by beefing up competitiveness in the space of the custom memory platform."
However, SK Hynix is not the only company to have benefited from the recent resurgence in demand for memory chips.
On April 30, Samsung Electronics reported its net operating profit soared by 933 percent in the first quarter of 2024, with the company’s HBM3E 8H memory offering having already gone into mass production that same month.
Meanwhile, Micron started volume production of its HBM3E (High Bandwidth Memory 3E) memory product in February, which will form will form part of Nvidia’s H200 Tensor Core GPU.
The company also received $6.14 billion in direct funding under the CHIPS and Science Act which the company is using to support the construction of three new memory chip fabs in New York and Idaho.
