Boosted by AI demand, SK Hynix takes the lead in mass producing 12-layer HBM3E.On Thursday, September 26th, SK Hynix announced that the company has started mass producing 12H (12-layer stack) HBM3E chips, achieving the largest 36GB capacity in existing HBM products; the company will provide this product to customers within the year.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/12e83922-ae43-4567-b000-c042f8c678d2.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/12e83922-ae43-4567-b000-c042f8c678d2.png"/>Following the announcement, SK Hynix's stock price continued to rise, surging over 8% at the time of writing.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/cc7a9357-1a3b-4566-9f21-d8e02fef0e85.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/cc7a9357-1a3b-4566-9f21-d8e02fef0e85.png"/><h2>HBM3E 12H becomes the main battlefield for suppliers in the second half of the year</h2>HBM (High Bandwidth Memory) is a key component of GPUs, helping to process large amounts of data generated by complex applications. Chip vertical stacking technology can save space and reduce power consumption.Currently, there are only three major manufacturers of HBM—SK Hynix, Micron Technology, and Samsung Electronics. Among them, Samsung Electronics first introduced HBM3E 12H in February this year.Considering NVIDIA's decision to incorporate HBM3E 12H into Blackwell Ultra and the lightweight model B200A, this product has become a key battlefield in the AI semiconductor field in the second half of the year.Some believe that the second half of this year is crucial for determining the future landscape of the HBM market. Whether SK Hynix can maintain its leading position or Samsung Electronics can reverse its decline will depend on who first provides HBM3E 12H to NVIDIA.A industry insider commented:<blockquote>&#34;Even though the price of HBM3E 12H may slightly decrease due to intensified competition, the second half of the year is clearly the time to determine the landscape of the HBM market.&#34;&#34;The key is how much each company's yield rate can be improved.&#34;</blockquote>Media reports revealed that SK Hynix has been a major supplier of NVIDIA's HBM chips and provided HBM3E to an unnamed customer at the end of March.<h2>Despite strong demand, Morgan Stanley warns of oversupply risks</h2>According to reports, SK Hynix's HBM3E 12H stacks 12 layers of 3GB DRAM chips, with the same thickness as the previous 8-layer product but a 50% increase in capacity. To achieve this goal, the company made each DRAM chip 40% thinner than before and used Through Silicon Via (TSV) technology for vertical stacking.The announcement also stated that the memory operation speed of HBM3E 12H has been increased to 9.6Gbps, which is currently the highest memory speed available in the industry. Running the Llama 3 70B large language model on a GPU with four HBM3E chips can achieve the ability to read 35 times 70 billion overall parameters per secondAccording to previous estimates by the media, compared to 8-layer stacking, HBM3E 12H has an average 34% increase in AI training speed, and the number of inference service users can also increase by more than 11.5 times.In addition, the company will use its core technology advanced MR-MUF process to improve the heat dissipation performance of HBM3E 12H by 10% compared to the previous generation, and enhance the control of warping issues to ensure stability and reliability.The company stated that the early mass production of 12-layer HBM3E is to meet the growing demand of AI enterprises. Justin Kim, President and Head of AI Infrastructure at SK Hynix, said:<blockquote>&#34;SK Hynix has once again broken through technological limitations, demonstrating our industry-leading position in the AI memory field.&#34;&#34;We will continue to maintain our position as the world's largest artificial intelligence memory supplier, steadily preparing for the next generation of memory products to overcome the challenges of the AI era.&#34;</blockquote>However, earlier, Morgan Stanley issued a research report warning of an &#34;impending memory winter&#34;, with potential oversupply of HBM and serious supply-demand imbalance in DRAM, among others.Morgan Stanley predicts that by 2025, the &#34;good&#34; supply in the current HBM supply chain (meaning high-quality and sufficient products) may gradually catch up with or even exceed the currently overestimated demand.Based on this, Morgan Stanley has issued a &#34;double downgrade&#34; on SK Hynix, lowering its rating to &#34;underweight&#34; while &#34;halving&#34; its target price from 260,000 Korean won directly to 120,000 Korean won, leading to a one-day stock price plunge of 11%

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After the announcement, SK Hynix's stock price surged by over 8%. Analysts believe that with NVIDIA's Blackwell Ultra and lightweight model B200A confirmed to introduce HBM3E 12H, it is crucial for SK Hynix, Samsung, and Micron to secure a leading position in this product field. The landscape of the HBM market in the second half of the year will depend on who first provides HBM3E 12H to NVIDIA

- SK Hynix has begun mass production of 12-layer HBM3E chips, achieving a capacity of 36GB, which is the largest among current HBM products.  
- Following the announcement, SK Hynix's stock price surged over 8%, highlighting the competitive landscape in the AI semiconductor market, particularly with NVIDIA's adoption of HBM3E 12H.  
- However, Morgan Stanley warned of potential oversupply risks in the memory market, leading to a downgrade of SK Hynix's stock rating and a significant reduction in its target price.

Micron: 12-layer HBM3E begins mass production ahead of schedule