SK Hynix Slows HBM4 Expansion to Focus on Conventional DRAM

SK Hynix is a leading supplier of high-bandwidth memory used in Nvidia’s artificial-intelligence accelerators, making its shares a closely watched gauge of AI infrastructure spending and the broader memory-chip cycle. The steep retreat from a record high has sharpened concerns about valuation and the durability of demand, while bringing labor relations and capital-return policy into focus as investors reassess the company’s outlook.

As of Aug. 27, 2026, SK Hynix shares had fallen about 45% from their all-time peak and were approaching a key support level at 1.62 million won. A production workers’ union rejected a proposed wage agreement, adding concern over operating stability. Markets are also assessing a 40 trillion-won treasury-share plan and awaiting Nvidia’s forthcoming earnings for signals on whether AI memory demand can sustain the next phase of the chip cycle.

SK Hynix has become a prime beneficiary of the AI infrastructure boom, using its lead in high-bandwidth memory, or HBM, to supply chips that feed data to AI accelerators. Demand for HBM, server DRAM and enterprise solid-state drives, combined with sharply higher memory prices, has turned a cyclical recovery into a semiconductor supercycle. KB Securities estimated that global technology companies and AI data-center operators represented about 70% of second-quarter revenue.

On July 29, SK Hynix reported 2026 second-quarter revenue of 79.32 trillion won and operating profit of 60.54 trillion won, up 257% and 557% from a year earlier, respectively. Its operating margin reached 76%. Net profit surged to 93.92 trillion won, producing a 118% net margin, as all three measures set quarterly records. Even so, revenue and operating profit missed a 14-brokerage consensus of 84.1 trillion won and 64.1 trillion won, showing how elevated expectations have become.

High-bandwidth memory has become a critical component in generative AI accelerators, combining advanced manufacturing, packaging and customer-specific design to deliver faster data transfer. With HBM4 reportedly accounting for more than half of an AI chip’s cost, suppliers such as SK Hynix are gaining greater influence over accelerator pricing, production schedules and the broader economics of expanding AI computing capacity.

SK Hynix said it is negotiating with major customers to finalize HBM supply volumes and pricing for 2027. The company said its prices would reflect advanced-process investment and the value of its products, rather than simply tracking conventional DRAM market prices. The talks come as HBM4 enters mass production and shipment, making the outcome increasingly important for the cost of next-generation AI chips.

High-bandwidth memory, or HBM, has become critical to AI chip performance as demand for AI computing surges. South Korean semiconductor giant SK Hynix plays a central role in its partnership with AI chip leader Nvidia. The latest HBM4 technology is both a key benchmark for AI servers and a decisive battleground for memory manufacturers seeking market dominance, making it significant to the global AI supply chain.

SK Hynix has formally begun mass production and shipments of 12-layer HBM4 for Nvidia’s next-generation Vera Rubin AI platform. Simplified validation and emergency production by the two companies have substantially shortened the shipment schedule, with volumes expected to expand significantly from September 2026. Market estimates indicate that SK Hynix could secure about 60%–70% of Nvidia’s HBM4 supply, maintaining its lead over Samsung and Micron in the global commercialization race.

As the artificial intelligence industry booms, high-bandwidth memory (HBM) has become a critical component in AI chips. South Korea announced an 800 trillion won semiconductor investment plan in June 2026 that aims to double SK Hynix and Samsung's DRAM capacity by 2030. As the HBM market leader, SK Hynix's expansion pace is crucial to the stability of global AI chipmakers' supply chains and could reshape supply and demand across the semiconductor industry.

Bank of America said in a July 2026 report that technical and construction bottlenecks could limit SK Hynix's additional memory capacity through 2028 to just one-sixth of the planned amount, while bringing new plants to full operation could take 10 years. The constraints threaten its goal of doubling capacity by 2030 and could directly slow its shift toward HBM and other critical AI components. Combined with a price-manipulation lawsuit facing the company, they could also prolong tight memory supplies.

Generative AI has driven rising demand for high-bandwidth memory, or HBM, allowing SK Hynix to expand its competitive advantage in the sector. Samsung Electronics, meanwhile, is contending with losses in both its foundry and System LSI divisions. The two companies are competing for engineers with mass-production experience, with implications for their strategies in advanced memory, logic chips and process technology.

SK Hynix has recently targeted mid-career employees in Samsung Electronics’ foundry and System LSI divisions. The recruitment drive comes amid internal reports of unequal bonus allocations at Samsung and growing employee discontent. Reports have not disclosed the number of hires, salary levels or exact dates, but the market is watching whether Samsung loses key HBM and advanced-process personnel.

High-bandwidth memory, or HBM, is a critical component that gives AI accelerators rapid access to vast amounts of data, directly affecting model training and inference efficiency. SK hynix is targeting next-generation AI data centers and large-scale computing systems with HBM4E, while using MR-MUF packaging to improve cooling, performance and stability in multilayer stacks.

SK hynix recently said it had supplied 12-layer HBM4E samples to major customers but did not disclose their names, shipment dates or transaction values. The new product delivers data-transfer speeds of 16 Gbps per pin and more than 20% greater energy efficiency than its predecessor. The company hopes customer validation will accelerate adoption in next-generation AI chips.

High-bandwidth memory (HBM) delivers large volumes of data to AI accelerators with high bandwidth and low power consumption, making it a critical component in the race for generative AI computing power. After a downturn in the memory market, SK hynix rebounded through technology investment and its supply partnership with Nvidia, becoming a key company in the global AI semiconductor supply chain.

South Korean broadcaster KBS was granted access to SK hynix’s M16 wafer fabrication plant for the first time. Its program “The World Seen for the First Time” showed the company’s secret HBM production line operating around the clock, along with employees at work. The report did not specify an air date, investment amount or production capacity, but footage from the facility showed the company working at full speed to meet demand for AI memory.

SK hynix is a leading global supplier of high-bandwidth memory, or HBM. Its operating profit could double as the expansion of generative AI model training drives memory demand. HBM has become a critical component in the AI server supply chain, and the company’s earnings directly affect whether semiconductor employees share in the industry’s gains.

As of July 20, 2026, SK hynix shares had surpassed 1.2 million won to reach a record high. After the company adopted a bonus system tied to operating profit, analysts estimated that employees’ average annual profit-sharing bonus could reach 700 million won, or about NT$15 million. Related reports put the amount at between NT$13 million and NT$15 million.

High-bandwidth memory, or HBM, is a critical component that gives AI accelerators rapid access to data, and supply has fallen short as data centers expand worldwide. SK hynix currently controls about 60% of the HBM market and is using advanced packaging and next-generation products to strengthen its lead while competing with Samsung Electronics and Micron for orders from major cloud providers.

SK Group Chairman Chey Tae-won recently pledged to sharply increase SK hynix's HBM output and accelerate the latest HBM4 into mass production to narrow the supply-demand gap for AI chips. He said adding wafer capacity takes at least four years and that tight global supplies could persist until 2030. The reports did not disclose the investment amount for the expansion or a specific production start date.