SK Hynix says it's readying HBM4 production, sending stock to record high

SK Hynix has completed internal certification and established a production system for its next-generation HBM4 chips, targeting mass production of 12-layer HBM4 in the second half of this year. This move reinforces its leadership and first-mover advantage in the high-bandwidth memory market, especially as a key supplier to Nvidia, leading to a 7% surge in its shares to a record high. While Samsung Electronics is aggressively pursuing HBM4 with a more advanced node to narrow the gap, SK Hynix is projected to maintain a dominant market share in the coming years, further solidified by the shift to customer-specific logic dies in HBM4, making product interchangeability more challenging.

Analysis

SK Hynix has reinforced its leadership position in the high-bandwidth memory (HBM) market by completing internal certification for its HBM4 chips and establishing a production system, with mass production of 12-layer products anticipated in the second half of this year. This proactive timeline, following sample shipments to customers in March, cements its first-mover advantage as a primary supplier to Nvidia and was met with significant market approval, evidenced by a 7% stock price surge to a record 328,500 won. While competitor Samsung Electronics is aggressively pursuing a catch-up strategy with a more advanced 1c-nanometer node for its HBM4 chips, its supply is not expected until next year. An analyst from Meritz Securities projects SK Hynix will maintain a dominant market share in the low 60% range into 2026. Critically, the technological evolution of HBM4 to include customer-specific base dies, as highlighted by an SK Hynix executive, reduces product interchangeability, which could create higher switching costs for customers and strengthen SK Hynix's incumbency against rivals like Samsung and Micron.

Key Decisions for Investors

• Investors should recognize that SK Hynix's progress on HBM4 solidifies its market leadership and that the shift to customer-specific dies may create a durable competitive advantage, justifying a continued positive outlook.
• Monitor Samsung Electronics’ execution on its more advanced 1c-nanometer HBM4 process, as any success in narrowing the technology and production gap poses the most significant threat to SK Hynix's market share.
• Given SK Hynix's substantial 88.9% year-to-date share price appreciation, it is prudent to consider that much of this optimistic outlook may already be priced in, warranting careful evaluation of entry points for new positions.
• The emerging trend of non-interchangeable HBM4 chips represents a structural shift in the memory industry, favoring incumbents with deep customer integration and potentially leading to more stable, long-term supply agreements.