SK Hynix Leads the DDR5 Memory Market with Impressive Yield Rates

According to a report by Korea Posts, SK Hynix is currently dominating the market for DDR5 memory chips. The company has achieved an impressive 90% yield rate for its 1a process node (14nm) DDR5 DRAM, putting them ahead of their competitors. Experts predict that SK Hynix's market dominance will continue into the next year, as Samsung and Micron entered the DDR5 market later.

DDR5 memory is expected to be a key focus for major storage manufacturers in 2023. The demand for high-capacity (128GB) DDR5 memory modules for servers is rapidly increasing. Currently, SK Hynix holds a 100% market share in this segment, while Samsung and Micron are currently unable to produce DDR5 memory with the same capacity.

While DDR5 memory has been adopted by consumer-level markets since late 2021, its adoption in the server domain has been slower due to the delayed release of server CPUs supporting the new memory specification by Intel and AMD. However, storage manufacturers recognize the significant potential for profit in the server market, which requires larger capacities. As a result, the demand for upgrading from DDR4 memory remains strong.

One challenge currently faced by the industry is the limited production capacity of DDR5 memory. Apart from SK Hynix, Samsung and Micron have lower yield rates. Additionally, SK Hynix is also leading in the next-generation 1b process node and holds a dominant position in HBM3 cache chip products, supplying them exclusively to NVIDIA. Although HBM chips currently account for only 10% of SK Hynix's total DRAM sales, analysts project a rise to 20% next year.

The promising market performance of DDR5 and HBM technologies is expected to significantly improve SK Hynix's profitability. Analysts from Korean securities companies forecast a narrower operating loss for the company in the second quarter compared to the first quarter.