SK hynix is expanding its high-bandwidth memory (HBM) production capacity at the Cheongju M15X fab to respond to market supply shortages and plans to dispatch some of its elite DRAM personnel from its headquarters in Icheon, Gyeonggi Province, to Cheongju. With the demand for HBM expected to fall short due to artificial intelligence (AI) needs next year, SK hynix has decided to accelerate its efforts to increase output to maintain its position as the market leader.
According to industry insiders on the 15th, SK hynix is expected to soon transfer some elite personnel specializing in DRAM frontend processes from its Icheon campus to the newly established Cheongju M15X fab, which is being developed as a 'DRAM production base.'
M15X is an expansion fab of the existing M15 that SK hynix is building with an investment of over 20 trillion won. It aims for completion in November next year and will focus on the production of HBM among DRAM varieties. The selected personnel will be responsible for foundational tasks necessary before the operation of M15X, such as infrastructure setup and equipment installation.
Major market research firms predict that supply will continue to lag behind demand in the HBM market. In fact, there has been a flood of orders from client companies requesting HBM. SK hynix's supply for next year is already 'sold out.'
Choi Tae-won, chairman of SK Group, noted at the 'SK AI Summit 2024' earlier last month that 'NVIDIA requests more HBM from SK hynix whenever a new graphics processing unit (GPU) comes out and always asks to advance the agreed schedule.' He also mentioned, 'When I last met with Jensen Huang, the CEO of NVIDIA, he asked me to advance the supply of HBM4 (6th generation) by six months.'
In response to concerns over a potential slowdown in HBM demand and oversupply, SK hynix dismissed it as 'premature,' forecasting that 'next year's HBM demand will increase more than expected due to the growing demand for AI chips and the confirmed willingness of customers to expand their AI investments.' Market research firm TrendForce also projected in a previous report that 'HBM has emerged as a key growth driver in the DRAM industry fueled by surging AI demand,' particularly noting that 'HBM3E (5th generation) will continue to experience tight supply next year.'
Meanwhile, SK hynix began delivering the 8-layer HBM3E to AI giant NVIDIA as the industry's first product last March and has since started mass production of the 12-layer HBM3E product, aiming for shipments this quarter.