SEOUL – South Korean semiconductor giant SK Hynix said on May 3 that its entire 2024 production of high-end memory chips was sold out, with most of next year’s line gone too – reflecting a huge demand for cutting-edge artificial intelligence (AI) hardware.

The company is the world’s second-largest memory chipmaker, and dominates the market for high-bandwidth memory (HBM) chips. It is a top supplier to Nvidia, which controls about 80 per cent of the global AI chip market.

SK Hynix told AFP that its HBM chips from 2024 were fully sold out.

Chief executive Kwak Noh-jung said at a news conference on May 2 that higher usage of AI devices “will lead to an explosive increase in demand for high-speed, high-capacity and low-power memory chips specialised for AI”.

With growing demand, AI hardware components such as HBM chips are expected to account for 61 per cent of the company’s chip production, said Mr Justin Kim, SK Hynix’s head of AI infrastructure, up from just 5 per cent in 2023.

SK Hynix also said this week it would be starting mass production of its top-of-the-line fifth-generation HBM chips in the third quarter.

It announced in April that it would collaborate with Taiwanese semiconductor giant TSMC to make next-generation HBM chips. TSMC is also an Nvidia supplier.

Thanks to strong sales of AI hardware components such as HBM chips, SK Hynix recorded its second-highest operating profit in the first quarter of 2024 – 2.9 trillion won (S$2.88 billion).

Micron, another Nvidia supplier, said in March that its 2024 HBM supply was sold out, and it had allocated “the overwhelming majority” of the 2025 output too. AFP