NVIDIA Supplier SK Hynix Reports HBM Chip Shortages For 2025

(CTN News) – With businesses aggressively expanding AI services, South Korea’s SK Hynix (000660.KS) said on Thursday that its high-bandwidth memory (HBM) chips have been sold out for this year and almost sold out for 2025.

During a news conference, Kwak Noh-Jung, Chief Executive Officer of Kwak Noh-Jung Corporation, stated that the HBM market is expected to continue to grow as the size of data and AI models increases. The annual growth rate of demand is anticipated to be approximately 60% in the medium and long term.”

According to analysts, SK Hynix, which competes with the United States’ Micron Corporation and Samsung Electronics (005930.KS) in the HBM market, was Nvidia’s sole HBM chip supplier until March. To maintain operating margins, major AI chip purchasers are seeking to diversify their SK Hynix suppliers. In the AI chip market, Nvidia controls approximately 80% of the market.

The majority of Micron’s 2025 supply has already been allocated, indicating that the company has sold out of its HBM chips for 2024. Samples of its 12-layer HBM3E chips will be provided to customers in March.

According to Jeff Kim, head of research at KB Securities, the market demand for ultra-high-performance chips, such as 12-layer chips, appears to be increasing at a faster pace than for 8-layer HBM3Es.

Samsung Electronics (005930.KS), which plans to produce its HBM3E 12-layer chips in the second quarter, said this week that they expect this year’s shipments of HBM chips to more than triple, and they have completed supply discussions with customers. The article did not provide any further details.

SK Hynix announced last month plans to build a $3.87 billion chip packaging facility in the state of Indiana, with an HBM chip line, as well as an investment of 5.3 trillion won ($3.9 billion) in a new DRAM chip factory at home.

The investment in HBM differs from past patterns in the memory chip industry because capacity is being increased only after determining demand.

Justin Kim, SK Hynix’s head of AI infrastructure, estimates that by 2028, AI chips, such as HBM and high-capacity DRAM modules, will account for 61% of all memory volume in terms of value from 5% in 2023.

SK Hynix said in its post-earnings conference call last week that there may be a shortage of regular memory chips by the end of the year if demand for tech devices exceeds expectations.

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

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