A new king is born in the memory market! Under the advantages of HBM, SK Hynix surpasses Samsung for the first time in Q2 to lead globally

Benefiting from the explosive demand for high-performance computing driven by the wave of artificial intelligence, SK Hynix has surpassed the long-time leader Samsung Electronics in quarterly revenue for the first time, becoming the world's largest memory manufacturer thanks to its absolute advantage in the high bandwidth memory (HBM) sector. Samsung Electronics reported on Thursday that its memory business revenue, including DRAM and NAND, fell to 21.2 trillion won (approximately USD 15.2 billion) for the three months ending in June. This figure is lower than the 21.8 trillion won reported by its competitor SK Hynix a week earlier, marking the first time SK Hynix has topped the company’s history. The driving force behind this change is the strong demand for HBM from AI chip leader NVIDIA and other customers. According to market research firm Counterpoint Research, SK Hynix currently holds a crucial and profitable 62% of the HBM market share, while Samsung's market share is only 17%, and it is still struggling to gain NVIDIA's certification for its advanced memory products. In the face of adverse conditions, Samsung is planning to adopt a more aggressive market strategy. Reports suggest that Samsung may lower the price of its HBM3E memory to attract key customers. Samsung has also acknowledged that its HBM products are facing price pressure due to supply growth outpacing demand growth, which could force the entire market into a new round of price competition and directly affect investors' expectations for industry profit prospects. Missing HBM Dominance, Samsung Seeks Price Cuts for Survival The growth trajectories of SK Hynix and Samsung began to diverge in the first half of 2024, fundamentally due to the surge in market demand for HBM. HBM achieves data processing speeds far exceeding traditional memory by vertically stacking multiple DRAM chips, making it a key component for training and running large AI models. Counterpoint Research Director MS Hwang stated: “We have just witnessed a significant shift as SK Hynix becomes the number one in the overall memory market for the first time in its history.” He added that this divergence is entirely driven by the demand for NVIDIA's AI products and their accompanying HBM. For Samsung, the second-quarter performance has sounded the alarm. The financial report shows that its chip business operating profit has suffered a staggering 94% decline. Although the company recently announced a USD 16.5 billion chip supply agreement with Tesla and gained adoption from customers like AMD in the HBM sector, its failure to enter NVIDIA's advanced HBM supply chain has always been its biggest pain point. To break the deadlock, Samsung seems prepared to use pricing weapons. According to ZDNet, Samsung stated in a financial report conference call: “For HBM3E products, as supply increases faster than demand growth, we expect the supply-demand relationship to change. We anticipate this will temporarily affect market prices.”