Samsung, SK Hynix Shift 20% of DRAM Lines to HBM

As leading storage chip manufacturers, Samsung and SK Hynix anticipate that the prices of DRAM and high-bandwidth memory (HBM) will remain strong this year due to rising demand for high-performance chips, especially those essential for artificial intelligence (AI) applications.

According to a report by Korea Economic Daily, to meet this increasing demand, Samsung and SK Hynix have converted over 20% of their DRAM production lines into HBM production lines. During an investor relations meeting hosted by Samsung Securities on May 9-10, both companies indicated that DRAM production would be adjusted in response to market demand.

Earlier in May, SK Hynix President and CEO Kwak Noh-jung announced that the company's HBM production capacity for this year is fully booked, with next year's production also nearly sold out. Similarly, Samsung Electronics reported that its HBM production is entirely sold out. "Considering the supply-demand situation, HBM will not be in oversupply in 2025," a Samsung investor relations officer commented.

The Samsung official also noted that the company has narrowed the gap with SK Hynix in the 8-layer HBM3E chip segment and is leading in the 12-layer HBM3E market. Samsung plans to commence production of 12-layer HBM3E chips as early as the second quarter of 2024.

This data suggests that despite facing intense market competition and price fluctuations, Samsung Electronics and SK Hynix remain optimistic about the future of the storage chip market. They are addressing the increasing demand by adjusting production lines and securing long-term supply contracts.

Additionally, both companies have a positive outlook on the price stability of traditional DRAM and solid-state drives (SSD). "I believe DRAM prices will not decrease this year," a Samsung official stated. "The growth in SSD demand is a long-term trend."