SK Hynix’s $75 Billion AI Power Play: DRAM Dominance & Streamlining

SK Hynix currently holds a dominant position in the high-bandwidth memory (HBM) market, with approximately 35% market share in DRAM. As one of the largest memory manufacturers, SK Hynix aims to invest in burgeoning technological advancements to further enhance its industry competitiveness.

According to Reuters, SK Hynix plans to invest 103 trillion Korean won (approximately $74.577 billion) over the next three years to bolster its control over the DRAM business and increase its focus on artificial intelligence (AI) technology applications. SK Group, the parent company of SK Hynix, stated that about 80% of the funds will be dedicated to the AI and semiconductor sectors to “enhance competitiveness by focusing on the AI value chain.” Additionally, part of the investment will be allocated to shareholder returns and the streamlining of over 175 subsidiaries.

In 2022, SK Hynix reported a loss of nearly $3 billion, marking its first deficit in a decade. Nevertheless, the AI boom has provided SK Hynix with a respite, enabling it to return to profitability in the fourth quarter of 2023. For SK Hynix, transitioning to the AI sector is a strategic move, especially as companies like Nvidia dominate the AI market. As a key supplier in Nvidia’s data center GPU supply chain, SK Hynix’s critical HBM products were instrumental in its swift recovery during the semiconductor memory market downturn.

To keep pace with AI trends and support the development of next-generation data centers, SK Hynix has also launched its first PCIe 5.0 SSD and is preparing to introduce a 300TB enterprise-grade SSD.