Big Tech fuels demand for new generation of chips
Demand for HBM chips (high-bandwidth memory) for artificial intelligence is set to explode, with expected annual growth of 30% through 2030. This surge is fuelled by growing AI investments from tech giants such as Amazon, Microsoft and Google.
SK Hynix, a leading memory-chip maker, underscores strong and persistent end-user demand for AI. The company points to a direct correlation between the growth of AI infrastructure and the volume of HBM chips that technology companies purchase. As AI systems become more advanced, they need more powerful and efficient hardware to handle complex workloads. This continuing cycle drives innovation in memory production, ensuring it keeps pace with the rapid expansion of the AI industry.
HBM memory is a specialised form of DRAM, engineered for high data-processing speeds with minimal power consumption. Its unique design shortens the distance data travels between layers, effectively reducing latency and boosting transfer speeds by vertically stacking multiple memory chips. SK Hynix forecasts that the market for custom HBM products will reach tens of billions of dollars by 2030. These tailored solutions are designed to improve speed, efficiency and scalability by tailoring them to specific AI model architectures or optimising performance for specialised workloads.
The industry is evolving toward the development of custom HBM products tailored to individual customer specifications. This trend will become evident in the next-generation HBM4, introduced by SK Hynix, Samsung and Micron. These new chips feature a customer-specific ‘base die’ that forms the core of the control layer, enabling manufacturers to fine-tune performance to the customer’s system requirements.
While the long-term outlook for HBM4 remains strong, there are short-term challenges. Samsung warns of possible price cuts due to a temporary oversupply of its HBM3E chips. SK Hynix, however, remains confident in its ability to deliver competitive products that meet customers’ evolving needs. The company believes that the arrival of HBM4 and the growing interest in customization will offset any short-term imbalance between supply and demand.
Geopolitical developments are also affecting the semiconductor market. Proposed tariffs on chips imported from countries without domestic semiconductor manufacturing facilities could hit SK Hynix and Samsung, although their significant investments in U.S. operations could mitigate the impact.
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