In an unprecedented move, several major global technology companies have stepped forward with proposals to financially back SK hynix's new memory chip production lines and costly manufacturing equipment, aiming to secure a steady supply of high-bandwidth memory (HBM) amid an AI-driven capacity crunch, according to sources familiar with the discussions.
SK hynix, a leading maker of HBM—a specialized type of memory that stacks DRAM chips for faster data transfer between memory and AI processors—confirmed it is reviewing alternative deal structures but declined to name the companies involved. The proposals come as demand from AI data centers has tightened memory supplies across the board, affecting servers, gaming consoles, smartphones, and PCs.
Capacity at Zero
"Available capacity is essentially zero right now," a source told Reuters, highlighting the severity of the shortage. Some customers are offering to fund dedicated production lines and assist with purchases of ASML's extreme ultraviolet (EUV) lithography machines, which cost hundreds of millions of dollars each and are essential for printing the minute circuits on silicon wafers.
This scramble underscores a shift from memory chips being a cyclical commodity to becoming a critical bottleneck in the AI supply chain. SK hynix's HBM leadership—with a 57% market share, according to Counterpoint—has put it in a powerful position, but the company is cautious about locking itself into long-term deals that could obligate it to sell chips at a discount or tie capacity to a handful of buyers.
Financial Strength
SK hynix reported first-quarter revenue of 52.5763 trillion won and an operating profit of 37.6103 trillion won, yielding a margin of 72%. AI-driven sales boosted HBM, server DRAM modules, and enterprise SSDs. On an earnings call, Ki Tae Kim, head of HBM sales and marketing, noted that client demand for HBM supply over the next three years "far exceeds our production capacity."
Competitors Samsung Electronics and Micron Technology are pushing for multi-year supply deals, but SK hynix's strong position in HBM gives it leverage. However, building new fabs takes at least a year, so the immediate shortage remains.
Ripple Effects
Downstream buyers are already feeling the pinch. Nintendo and Sony recently pointed to soaring memory prices hurting their gaming segments, with prices doubling between quarters and expected to climb up to 63% further this quarter. HSBC analyst Kazunori Ito warned that "waiting for market conditions to improve is not a viable option."
SK hynix shares closed Friday at 1,686,000 won, up 1.93%, after hitting a 52-week high of 1,689,000 won earlier in the week, following announcements from U.S. tech firms about ramped-up AI data-center spending.
Strategic Dilemma
While customer cash offers a path to expansion, it comes with conditions. SK hynix must weigh the risk of regulatory scrutiny and the appearance of favoring certain AI chip buyers. SK Group Chairman Chey Tae-won has flagged that the wafer crunch could persist until 2030, given AI's appetite for HBM and the four-to-five-year lead time to ramp up wafer production.
The proposals mark a shift from traditional long-term supply agreements to structural alternatives that could reshape the memory chip industry. As Big Tech moves from haggling over prices to directly funding fabs, the dynamics of supply and pricing may become increasingly tied to a handful of major buyers, altering the landscape for years to come.
