SK hynix forecasts demand for high-bandwidth memory (HBM) will exceed supply for 3+ years due to AI. After record quarterly results, it pledges to meet orders as the memory price upcycle continues amid strong demand and supply constraints.
SK hynix anticipates that demand for high-bandwidth memory will outpace supply for at least the next three years, as the chipmaker pledges to meet orders on time following record-breaking quarterly results.
Record Financials and Market Upswing
The company noted that the current upcycle in memory prices is likely to continue, driven by strong demand for HBM, server DRAM, and enterprise solid-state drives alongside persistent supply constraints. According to a report by The Korea Herald, the memory chip maker reported its sales posted an all-time high of 52.6 trillion won (USD 39 billion) in the January-March period. Operating profit jumped 405 per cent to 37.6 trillion won (USD 25.6 billion), marking a fourth straight quarter of record results. Revenue topped 50 trillion won (USD 34.1 billion) for the first time in a single quarter, while the operating margin nearly doubled on-quarter to reach 72 per cent.
"Despite the fact that first quarter is typically a seasonal downturn, strong demand persisted due to expanded investments in AI infrastructure," the report quoted Kim Woo-hyun, chief financial officer at SK hynix.
Navigating Supply-Demand Imbalance
Park Joon-deok, vice president leading DRAM marketing at SK hynix, said during an earnings call for Q1 that as this supply-demand imbalance persists, customers are prioritising volume over price. He noted that the growing importance of memory in AI computing is being reflected in pricing and that favourable pricing conditions are expected to continue for the time being.
"Supply constraints limit our ability to meet all requests for now. But wider adoption of multi-year LTAs could improve demand visibility and support more stable earnings, enhancing investment efficiency," the report quoted Park. He added that this could help the cyclical volatility that has historically defined the memory industry.
AI Evolution Broadens Memory Demand
Regarding the evolution of technology, Kim Woo-hyun explained that AI is moving from large-scale model training to agentic systems that perform repeated real-time inferences in diverse environments. He said the demand base for memory was set to broaden across both DRAM and NAND flash.
Future Investments and Product Roadmap
The report mentioned that the company plans to deliver HBM4E samples in the second half of this year and start mass production in 2027. "The 1c process has already reached stable mass production and yield levels," the report quoted Kim Ki-tae, head of HBM sales and marketing. The company is also increasing investment significantly compared to the previous year, focusing on the ramp-up of M15X and infrastructure preparation on the Yongin cluster. The chipmaker has pulled forward the opening of its first Yongin fab by three months to February next year to address mid- to long-term customer demand.
Hybrid Model to Reinforce Demand
Song Chang-seok, head of NAND marketing at SK hynix, addressed concerns that SRAM-based LPUs or cache optimisation could dampen memory demand, stating that these technologies will complement rather than replace current architectures. "A hybrid model is highly likely, with LPUs handling latency-sensitive tasks and GPUs paired with HBM managing more complex workloads, reinforcing demand for high-performance memory," the report quoted Song.
(ANI)
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