South Korea’s SK hynix expects the market for AI-focused memory to expand about 30% per year through 2030, according to Choi Joon-yong, head of HBM business planning, in an interview with Reuters. End-user demand for AI is “very firm and strong,” he said, adding that massive capital spending by Amazon, Microsoft, and Google will likely be revised upward—an outcome that would be “positive” for high-bandwidth memory (HBM).

SK hynix projects the custom HBM segment alone will reach the tens of billions of dollars by the end of the decade.

Why HBM matters for AI

Introduced in 2013, HBM is a type of DRAM that stacks chips vertically, saving space and cutting power consumption—crucial advantages when training and running large AI models. SK hynix is developing next-gen HBM4 with a customer-specific “base die” (logic die) to manage memory and enable deeper customization. These bespoke designs make simple one-for-one substitution with a rival’s part far harder.

Large customers such as Nvidia receive tailored HBM configurations, while smaller clients use standard designs. “Each customer has different taste,” Choi noted, with varying targets for performance and power.

Competition and supply dynamics

SK hynix is Nvidia’s primary HBM supplier, with Samsung Electronics and Micron Technology shipping smaller volumes. Competitive pressures persist: Samsung recently cautioned that near-term HBM3E supply could outstrip demand growth, potentially weighing on prices. Even so, Choi said SK hynix is confident it can deliver “the right competitive product” to customers.

U.S. trade backdrop and market access

The U.S. remains critical for Korean chipmakers. After Donald Trump suggested a 100% tariff on chips imported from countries without U.S. production plans, South Korea’s trade envoy Yeo Han-koo said Samsung and SK hynix would not be affected thanks to their U.S. investments. Samsung operates fabrication plants in Austin and Taylor, Texas, while SK hynix is building an advanced packaging facility and AI R&D center in Indiana. In 2024, South Korea exported $10.7 billion in chips to the U.S., or 7.5% of its total chip exports.

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