Samsung’s biggest memory rivals are planning a partnership with Kafka-esque implications: SK Hynix and Kioxia could build lucrative HBM chips for Nvidia, AMD and others
South Korean chipmaker SK Hynix, a major Nvidia supplier, says it has already sold out its entire production of high-bandwidth stacked memory DRAMs by 2024, crucial for AI processors in data centers. That’s a problem, given the demand for HBM chips right now.
However, a solution may have presented itself as SK Hynix is in talks with Japanese firm Kioxia Holdings to jointly produce HBM chips.
SK Hynix, the world’s second-largest memory chip maker, is a major shareholder in Kioxia, the world’s No. 2 NAND flash manufacturer, and if the deal goes through, the high-end chips could be produced in facilities partnered with Kioxia and the American Western Digital Corp. in Japan.
A merger is on the cards
What makes this situation even more interesting is that Kioxia and Western Digital are in merger talks, something SK Hynix is against for fear it would reduce its chances with Kioxia. Since SK Hynix is a major shareholder in Kioxia, the merger of the Japanese company and Western Digital cannot go ahead without his blessing, and this new move can be seen as a major sweetener to move things forward.
After news of the potential deal broke, SK Hynix issued a statement simply saying: “There is no change in our position that if there is a cooperation opportunity, we will discuss it.”
If the Kioxia-Western Digital merger goes through, the company will potentially become the world’s largest NAND memory manufacturer, surpassing current leader Samsung, so there’s a lot to play for.
The Korea Economic Journal says of the move: “The partnership is expected to strengthen SK Hynix’s leadership in the HBM segment, which is almost evenly split with Samsung Electronics. Kioxia will likely transform NAND flash lines into those for HBMs, which are used for generative AI applications, high-performance data centers and machine learning platforms, contributing to a revival of the Japanese semiconductor market.”