SK Hynix commences mass production of next-generation memory chips for Nvidia

Nvidia supplier SK Hynix: SK Hynix Inc announced on Tuesday the initiation of mass production for its next-generation high-bandwidth memory (HBM) chips, vital components in artificial intelligence (AI) chipsets. The company revealed that initial shipments of these advanced chips are slated for Nvidia this month, news agency Reuters reported, quoting sources.

The newly developed chip, dubbed HBM3E, has emerged as a focal point of intense competition within the semiconductor industry. Last month, Micron Technology declared the commencement of mass production for similar chips, while Samsung Electronics proclaimed the development of the industry's first 12-stack HBM3E chips.

SK Hynix has maintained its dominance in the HBM chip market by serving as the sole supplier of the current version, HBM3, to Nvidia, which commands an 80 per cent share of the AI chip market.

In a statement, SK Hynix expressed confidence in the successful mass production of HBM3E, leveraging its experience as the industry's inaugural provider of HBM3. The company anticipates solidifying its leadership position in the AI memory sector.

The latest HBM3E chip, manufactured by the world's second-largest memory chipmaker, offers notable enhancements, including a 10 per cent improvement in heat dissipation and the ability to process up to 1.18 terabytes of data per second.

Analysts indicate that SK Hynix's HBM capacity is fully booked for 2024, propelled by surging demand for AI chipsets, which necessitate high-end memory chips.

Kim Un-ho, an analyst at IBK Investment & Securities, remarked, "SK Hynix has secured an absolute market position... and its volume increase in high-end memory chips is also expected to be the most aggressive among chipmakers."

Meanwhile, Nvidia unveiled its latest flagship AI chip, the B200, on Monday, boasting a purported 30-fold increase in speed compared to its predecessor, as the company endeavors to uphold its dominant position in the artificial intelligence industry.

Shares of SK Hynix have surged twofold over the past 12 months, fueled by its leading role in HBM chips.

(With Reuters inputs.)