SK Hynix forecasts 30% annual high-bandwidth memory growth through 2030 as AI demand surges

SK Hynix is forecasting explosive growth in the high-bandwidth memory (HBM) market, projecting a 30% annual expansion through 2030 as AI infrastructure demand surges globally. The South Korean memory giant’s optimistic outlook comes as it solidifies its position as Nvidia’s primary HBM supplier, with the custom HBM sector expected to reach tens of billions of dollars by decade’s end.

What you should know: SK Hynix anticipates sustained AI demand will drive unprecedented growth in specialized memory technology over the next six years.

• The company projects 30% annual growth rates for HBM through 2030, fueled by expanding AI infrastructure requirements from major cloud providers like Amazon, Microsoft, and Google.
• HBM technology stacks memory chips vertically like floors in a building, reducing power consumption and physical space while improving data-processing speed—making it essential for advanced AI applications.
• The specialized memory technology, first introduced in 2013, has become increasingly critical as AI workloads demand higher performance and energy efficiency.

Tariff concerns addressed: South Korean chipmakers appear insulated from potential US semiconductor tariffs due to their American investment commitments.

• While President Donald Trump proposed approximately 100% tariffs on semiconductor chips from nations without US manufacturing operations, South Korean officials indicate both SK Hynix and Samsung Electronics would be exempt.
• SK Hynix is investing in US manufacturing capacity, including an advanced chip packaging plant and an AI research facility in Indiana, which could help safeguard against trade disruptions.
• South Korea’s chip exports to the US were valued at $10.7 billion last year, with HBM shipments to Taiwan for packaging increasing sharply in 2024.

Competitive dynamics: The HBM market is becoming increasingly customized, with companies developing harder-to-substitute products.

• SK Hynix and competitors including Samsung and Micron Technology are developing HBM4 products that integrate a “base die” for memory management, making it more difficult for rivals to replace their solutions.
• Larger clients like Nvidia receive highly customized solutions, while smaller customers often rely on standardized designs.
• Samsung recently cautioned that near-term HBM3E production could exceed market demand growth, potentially pressuring prices and highlighting the cyclical nature of semiconductor markets.

What they’re saying: SK Hynix executives express confidence in meeting diverse customer requirements as AI demand remains robust.

• “AI demand from the end user is pretty much, very firm and strong… Each customer has different taste,” said Choi Joon-yong, head of HBM business planning at SK Hynix.
• “We are confident to provide, to make the right competitive product to the customers,” he added.
• Choi suggested capital spending from major cloud service providers could be revised upward, reflecting the direct correlation between AI infrastructure expansion and HBM demand.

Why this matters: The HBM market’s explosive growth trajectory reflects the broader AI infrastructure boom, but success will depend on companies’ ability to navigate customization demands and cyclical pricing pressures in an increasingly competitive landscape.