South Korean semiconductor company SK Hynix has revealed that its high-bandwidth memory (HBM) chips, crucial for AI chipsets, are almost sold out for 2025. This is due to the increasing demand for artificial intelligence services, primarily driven by the AI industry’s expansion.
What Happened: SK Hynix, a major supplier to NVIDIA Corp NVDA, is experiencing a surge in demand for its HBM chips, which are used in AI chipsets, Reuters reported.
The company has reported that its HBM chips are already sold out for 2024 and are almost sold out for 2025. This is a result of the rapid expansion of AI services by businesses.
“The HBM market is expected to continue to grow as data and (AI) model sizes increase,” CEO Kwak Noh-Jung said in a news conference. “Annual demand growth is expected to be about 60% in the mid- to long-term.”
According to Justin Kim, head of AI infrastructure at SK Hynix, the share of chips designed for AI, like HBM and high-capacity DRAM modules, is predicted to rise from roughly 5% in 2023 to 61% of all memory volume by 2028.
Why It Matters: The increasing demand for HBM chips is a direct result of the booming AI industry. SK Hynix’s strong performance in the AI chip sector has been a significant contributor to its recent turnaround. The company reported its first profitable quarter in five, attributing the success to soaring demand for AI chips.
SK Hynix’s investment in HBM chips is part of a broader trend in the semiconductor industry. The South Korean semiconductor industry, including companies like SK Hynix and Samsung Electronics Co SSNLF, has seen substantial growth, marking a significant rebound in production and shipments.
Moreover, SK Hynix’s investment in the U.S. semiconductor industry is a significant step towards bolstering America’s semiconductor industry. The company’s plans to invest approximately $4 billion to establish an advanced chip-packaging facility in Indiana align with the Biden administration’s goals to reestablish the U.S. as a semiconductor powerhouse.
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