Fueled by the artificial intelligence (AI) boom, the memory chip market is in a supercycle, but SK hynix's DRAM market share is actually slipping. It's not because it can't sell DRAM. It's the result of a product mix heavy on high bandwidth memory (HBM) and differences in output compared with Samsung Electronics. Industry observers say it's hard to judge SK hynix's competitiveness by overall DRAM revenue share alone.
According to market researcher TrendForce on the 14th, SK hynix's second-quarter DRAM revenue rose 37.9% from the prior quarter to $38.59 billion. However, its share fell 3.9 percentage points (P) to 24.9% from 28.8%. Samsung Electronics held first place at 39.4%, and Micron narrowed the gap with SK hynix to 1.6 percentage points at 23.3%.
◇ HBM sold well, so why did DRAM share fall?
The decline in SK hynix's share was influenced by its product mix. In the second quarter, total DRAM market revenue jumped 59.5% from the previous quarter. A shortage in supply sharply pushed up general-purpose DRAM prices.
By contrast, among the three memory makers, SK hynix has the highest share of HBM shipments. As general-purpose DRAM prices surged, Samsung Electronics and Micron enjoyed a relatively larger average selling price (ASP) boost. In the second quarter, Samsung Electronics' DRAM revenue increased 63.4% from the prior quarter, Micron's rose 65.5%, outpacing SK hynix's growth rate (37.9%).
There is also a difference in production scale. A semiconductor industry official said, "Samsung Electronics inputs more DRAM wafers than SK hynix, and thus produces a larger DRAM volume," adding, "Given SK hynix's characteristics of having a high HBM mix, it's hard to say its competitiveness has weakened solely because its overall DRAM revenue share fell."
Park Jae-geun, a distinguished professor in the Department of Electronic Engineering at Hanyang University, said, "In the long term, HBM demand will continue to increase, but general-purpose DRAM demand will not grow by the same margin," adding, "Because SK hynix has a high HBM mix, it's difficult to judge competitiveness by overall DRAM share alone. We should also consider that Samsung Electronics originally produces about 20% to 30% more DRAM than SK hynix."
◇ HBM matters more than "25%"… surging general-purpose DRAM prices complicate the math
The center of gravity in the DRAM market is shifting to HBM. HBM, used in AI accelerators, has higher technical barriers and added value than general-purpose DRAM. SK hynix is leading the HBM market, with a 58% global HBM revenue share in the first quarter of this year.
If HBM demand increases structurally, the meaning of a decline in overall DRAM market share could differ from the past. Rather than boosting share by producing more general-purpose products, securing profitability in high value-added products such as HBM has become more important.
However, with prices for general-purpose and server DRAMs surging recently, SK hynix's calculus has grown more complicated. The more capacity it allocates to HBM, the more it must forgo opportunities to sell additional general-purpose DRAM whose prices have risen.
A semiconductor industry official said, "As general-purpose DRAM prices rose far more than expected, the opportunity cost of concentrating capacity on HBM has grown compared with before," adding, "However, considering long-term demand and profitability, it's unlikely the HBM-centered product strategy itself will change."
HBM requires more wafer input than general-purpose DRAM, and with each generation, chip area and process complexity are rising. The expansion of HBM production is constraining general-purpose DRAM supply, in turn fueling price increases.
SK hynix's 25% DRAM share is hard to view as a simple sign of weakening competitiveness. It is closer to an outcome of a shifting profit structure in the memory market centered on HBM. Still, how much SK hynix can capture the profits of server and general-purpose DRAM, whose prices have surged, while defending its HBM crown, is emerging as its new challenge.