There is an outlook that Samsung Electronics will overtake SK hynix and rise to No. 1 in next year's high-bandwidth memory (HBM) market. Nvidia, the industry's largest customer, is increasing the share of Samsung Electronics' sixth-generation HBM (HBM4) products, and AMD, which has emerged as a new "big spender," is also making Samsung Electronics its main supplier and prioritizing Samsung Electronics' HBM4 for its Helios AI platform, further solidifying its standing in the industry.
◇ UBS: "Market landscape for HBM to shift next year, Samsung to take No. 1"
According to a report released by investment bank UBS on the 30th (local time), Samsung Electronics is expected to catch up with SK hynix in absolute volume from this year into next year, starting with HBM4. UBS analyst Nicolas Gaudoin noted in a client memo that Samsung Electronics will take the top spot next year with 41% of HBM bit shipments. SK hynix is expected to hold No. 1 this year with 48% but fall to No. 2 next year with 39%, while Micron is projected to remain No. 3 with 20%.
UBS previously said in a May report that Samsung Electronics would reach parity with SK hynix by 2027, but this report moves up the timing of the reversal. A person familiar with Samsung Electronics said, "In terms of the pace of HBM4 certification and Production yield improvements, Samsung Electronics is making the fastest progress," adding, "Given the hyperscaler certifications and the speed of volume increases, the market situation will not be much different from UBS' view."
In fact, until last year, Nvidia was reluctant to purchase Samsung Electronics' HBM3E, but it is showing strong willingness to adopt HBM4. AMD has also chosen Samsung Electronics as its main supplier and is prioritizing Samsung Electronics' HBM4 for its next-generation AI system "Helios." As the industry moves into the HBM4 generation, there is a growing possibility that the monopolistic position SK hynix has maintained will be shaken.
◇ SK hynix expands HBM capital expenditures, but physical room for expansion is limited
SK hynix is responding by expanding capital expenditures. UBS noted that SK hynix management raised its annual capital expenditure guidance to the high 40 trillion won range in its second-quarter earnings release. However, analysts say that with existing production bases limited to Gyeonggi Icheon and Cheongju, North Chungcheong, the pace of expansion will inevitably be slower than Samsung Electronics, which has secured large idle land in Pyeongtaek.
SK hynix also said that renewals of long-term agreements (LTA) are proceeding faster than expected. Ten contracts have been signed, including with U.S. hyperscalers and major original equipment manufacturers (OEM) of finished goods. UBS assessed that while such contracts limit room for near-term selling price increases, they will be positive for profitability and shareholder returns over the long term.
Actual results also suggest that SK hynix's transition to HBM4 is lagging behind Samsung Electronics. According to UBS, SK hynix's second-quarter average selling price (ASP) for DRAM rose only 30% from the previous quarter, largely because HBM4 shipments did not ramp up in earnest until the latter part of the quarter. While Samsung Electronics increased HBM4 volumes first and expanded shipments to Nvidia and AMD, SK hynix's slower transition to HBM4 meant that the unit price uplift was reflected that much later.