The high bandwidth memory (HBM) market leader SK hynix has set a new quarterly performance record for the first quarter. With the demand for high-value semiconductors increasing, not only for the fifth-generation HBM (HBM3E), which has established itself as the main product in the HBM market, but also for server DRAM and corporate SSD (eSSD), concerns over U.S. tariff policies have led to a rapid increase in inventory buildup among clients.
However, forecasts suggest that competition for volume in the HBM market between Samsung Electronics, Micron, and others will intensify starting in the second half of the year. Micron has begun full-scale shipments of HBM3E products after passing quality tests from NVIDIA, while Samsung Electronics is conducting quality tests with the aim of supplying in the second half. SK hynix maintains that the impact on performance will not be significant since it has completed supply contracts with companies like NVIDIA this year, but analyses suggest that it will be difficult to maintain current market dominance over the mid to long term. Concerns have been raised as uncertainties regarding U.S. tariff policies have not yet been resolved, leaving them as ongoing risks.
◇ HBM3E 8-layer, 12-layer sales expansion… “This year, the HBM market position is solid”
On the 24th, SK hynix announced in its earnings report conference call that its revenue for the first quarter reached 17.6391 trillion won, with an operating profit of 7.4405 trillion won. Compared to the same period last year, revenue increased by 41.9%, and operating profit surged by 157.8%. The operating profit also significantly exceeded the consensus forecast in the securities industry of 6.5929 trillion won. This operating profit represents the highest figure for the first quarter and the second-highest figure in history.
SK hynix has seen a significant increase in operating profit compared to the same period last year by stably supplying the market's key product, HBM3E, ahead of its competitors. This performance surpasses the revenue scale of Samsung Electronics. On the 8th, Samsung Electronics reported a preliminary operating profit for the first quarter of 6.6 trillion won. The estimated operating profit for Samsung Electronics' semiconductor division (DS) memory division is around 3.5 trillion won. This figure is approximately twice that of Samsung Electronics' memory division.
The position of SK hynix in the HBM market is expected to remain solid for the time being. Although Micron has entered NVIDIA's HBM3E supply chain, SK hynix is currently the only supplier of HBM3E 12-layer. SK hynix stated that it expects the proportion of HBM3E 12-layer to exceed 50% of total sales starting from the second quarter.
Kim Un-ho, a researcher at IBK Securities, noted, "It is anticipated that HBM3E 12-layer will become the main product in the market in the second half, and SK hynix is still the only company supplying this product," adding, "The position in the HBM market will be maintained until the end of this year."
◇ Competition intensifies for next year's HBM volume… U.S. tariff risks remain
However, as Micron aggressively expands its production capacity, Samsung Electronics is also in the midst of quality testing with the goal of entering the HBM3E market in the second half, leading to analyses suggesting that competition for HBM supply volumes will intensify. An industry official remarked, "While the supply volume contracts this year are practically complete, the volumes for next year, including additional contracts, remain to be seen," and added, "With a more diverse array of suppliers, it will be difficult to maintain the previous market position."
In the earnings report conference call, SK hynix stated, "The position remains unchanged that there will not be significant changes in HBM demand this year, as we confirm supply volumes a year in advance. We will ensure visibility of next year's supply volumes within the first half," and added, "We will continue to collaborate with clients to facilitate early mass production of the sixth-generation high bandwidth memory (HBM4), which will be a key product next year."
The United States' tariff policies continue to be viewed as uncertain. Trump has somewhat softened his previous position of imposing significant tariffs on semiconductors and other electronic products by stating he would apply "flexible tariffs," but it is widely anticipated that tariff policies aimed at nurturing the domestic semiconductor industry will be announced, including incentives to encourage local production.
During the earnings report conference call, SK hynix said, "The lack of detailed information regarding country-specific tariffs and tariff targets creates significant uncertainty," and noted, "While the U.S. regional revenue share is high at 60% according to the corporate location in the audit report, the proportion of shipments to the U.S. is not large. We will strengthen cooperation with clients to minimize the impact of tariffs."