SK hynix is rapidly expanding the share of production for 10-nanometer-class sixth-generation (1c) DRAM. Because 1c DRAM will be applied as the core chip stacked in high-bandwidth memory (HBM) starting with the next-generation HBM4E, the company is speeding up its process migration. As demand grows for high-value memory for servers and artificial intelligence (AI), competition with Samsung Electronics and Micron to advance to finer processes is getting fiercer.
◇ "Share of 1c process seen at 34% or more within the year"
On the 7th, industry sources said SK hynix's share of 1c DRAM expanded from around 10% in the first quarter of this year to the 13% range in the second quarter. In the third quarter, it is expected to reach the 24% range, and in the fourth quarter, the 34% range. In the first quarter of next year, the 1c share is projected to climb into the 35% range, surpassing 1b (33% range) for the first time to become the main process.
The share of 1b (10-nanometer-class fifth-generation) DRAM peaked in the 43% range in the second quarter of this year and then began to decline. As migration to 1c ramps up, the share of older-generation processes is sequentially shrinking. According to industry estimates, as of the end of the second quarter of this year, Samsung Electronics' 1c share was in the 16% range and Micron's in the 19% range, somewhat ahead of SK hynix (13% range). However, as SK hynix has accelerated its transition in the second half, it is expected to overtake Samsung Electronics in the fourth quarter (34% range vs. 31% range).
At last month's second-quarter earnings conference call, SK hynix said DRAM supply using the 10-nanometer-class sixth-generation (1c) process began in earnest in the second quarter. SK hynix projected that, alongside increased volumes of HBM4 (sixth-generation HBM) in the second half, shipments of 1c-based commodity DRAM will rise, and bit growth (growth rate of production volume) will be higher than in the first half.
◇ Process migration to prepare for HBM4E performance gains
The battle for leadership in HBM4 between Samsung Electronics and SK hynix is also tied to the pace of the 1c transition. Samsung Electronics is applying 1c DRAM starting at the HBM4 stage, touting top performance with an operating speed around 11.7 Gbps. SK hynix, in contrast, chose a strategy prioritizing mass-production stability with proven 1b DRAM and advanced MR-MUF packaging technology, and first applied 1c DRAM as the core HBM chip starting with next-generation HBM4E (seventh-generation HBM).
Industry observers say this strategic difference is reflected in the two companies' market shares. Major research firms including Counterpoint Research project that, on a combined basis for Nvidia, Google and AMD this year, HBM4 market share will be in the mid-50% range for SK hynix, the high-20% range for Samsung Electronics, and the high-10% range for Micron. While SK hynix maintains a volume edge by emphasizing mass-production stability, Samsung Electronics is seeking to expand share with a technical spec advantage.
Amid this, there is analysis that SK hynix's acceleration of the 1c transition will yield tangible benefits beyond simple shrinkage, in terms of cost and productivity. As bit output per wafer increases compared with the previous generation, more bits are produced per the same wafer input, improving cost competitiveness, which is seen as a factor that will help defend profitability in the DRAM business in the second half and beyond. Because the 1c transition is progressing alongside a rising share of high-value products for servers and HBM, productivity gains are highly likely to translate directly into margin improvement.
A semiconductor industry official said, "The speed of the 1c transition itself is encouraging, but it is meaningful only if actual mass-production Production yield and customer qualification schedules back it up," and added, "Competition in fine processes between Samsung Electronics and SK hynix will intensify starting with HBM4E."