Nvidia supplier SK Hynix’s stock jumps as mass manufacturing of new HBM chips for AI starts

SK hynix’s stock jumped about 9% on Thursday on the Korea Exchange after the company said it began mass production of the world’s first 12-layer HBM3E product with 36GB capacity, the largest capacity of existing HBM to date.

The South Korean company — which supplies Nvidia (NVDA) with high bandwidth memory, or HBM, chips — plans to supply mass-produced products to customers by the end of the year.

SK hynix noted that previously the maximum capacity of HBM3E was 24GB from eight vertically stacked 3GB DRAM chips. The company stated that it had delivered the HBM3E 8-layer product to customers for the first time in the industry in March this year.

According to the company, the 12-layer HBM3E product meets the world’s highest standards in all areas that are essential for AI memory, including speed, capacity and stability.

The new 12-layer HBM3E product has a 50% bigger capacity than the previous eight-layer chips.

“SK hynix has once again broken through technological limits demonstrating our industry leadership in AI memory,” said Justin Kim, President (Head of AI Infra) at SK hynix.

SK hynix’s HBM chips are optimized for use with Nvidia’s AI accelerators. The market for HBM is led by South Korean companies SK Hynix and Samsung (OTCPK:SSNLF), and to a lesser extent by American chipmaker Micron Technology (MU). SK Hynix and Samsung help make South Korea the world’s largest producer of memory chips.

Samsung said in July that it plans to supply its production-ready HBM3E 12-high units in the second half of 2024, while Micron noted earlier this month that it was shipping production-capable HBM3E 12-high units to vital industry partners for qualification, as per a report from Reuters.

Samsung’s stock rose about 4% on Thursday on the Korea Exchange.