Samsung Electronics’ HBM4. Photo courtesy of Samsung Electronics
Samsung Electronics (005930.KS) has achieved strong yields on its sixth-generation high-bandwidth memory, HBM4, marking what analysts call a new phase in its battle with SK hynix (000660.KS) for leadership in the HBM market. The market, where SK hynix has run out ahead with a majority share, is shifting rapidly beyond a “technology development” stage toward competition over “production capacity” built on stable yields.
Industry watchers point to the synergy of Samsung’s “turnkey” system as the reason the company defied expectations by reaching an 80% yield just six months into HBM4 mass production. Samsung’s memory, foundry and advanced packaging units collaborated as one team from the design stage, succeeding in simultaneously controlling and optimizing speed, power and heat. This, analysts say, allowed the company to overcome the limits of the thermal-compression non-conductive film (TC-NCF) process, long considered the biggest hurdle to achieving high yields.
Samsung is showing strong confidence in retaking the market on the strength of its stabilized yields. Kim Jae-jun, executive vice president of Samsung Electronics’ memory business, said on a second-quarter earnings conference call late last month that HBM4 revenue in the third quarter would more than triple from the previous quarter, and that in the second half, HBM4 revenue would comfortably exceed 60% of total HBM revenue.
The financial investment sector is also leaning toward the possibility of Samsung overtaking SK hynix in HBM share. Global investment bank UBS said in a recent report that while SK hynix would keep the No. 1 spot this year with a 48% share by HBM bit shipments, Samsung would take 41% next year, edging past SK hynix’s 39%.
SK hynix, which has held an overwhelming lead, is mounting a formidable defense. The company is defending its front-runner position by touting its experience mass-producing every generation of HBM from the first, along with firm customer trust, as its greatest weapons. Kim Ki-tae, executive vice president in charge of HBM sales and marketing at SK hynix, said on the second-quarter conference call that HBM4 competitiveness is complete only when it encompasses the ability to supply in large volumes with stable yields and quality, adding that current mass-production yields and quality are close to those of the previous-generation HBM3E product, which has entered a mature stage.
The industry believes SK hynix’s HBM4 yield has climbed to the 80% range. Having already secured a high yield on HBM4 based on its advanced mass reflow molded underfill (MR-MUF) technology, which underpinned its high yields before, the company is seen as able to respond with stable volumes even against Samsung’s fierce pursuit.
In response, Samsung is accelerating short-term facility expansion centered on its Hwaseong and Pyeongtaek sites, stabilizing HBM4 yields while responding to demand from global Big Tech. At its Hwaseong Campus Complex 1 (H1), it is using idle cleanrooms to expand an end-fab for commodity DRAM — the final step in the front-end wafer manufacturing process. At its Pyeongtaek Campus, it is building a production line at Pyeongtaek Plant 4 (P4) for the latest sixth-generation (1c) 10-nanometer-class DRAM for HBM, while proceeding with construction of Plant 5 (P5-1) and Plant 6 (P5-2) on a new site.
With it typically taking more than three years from new fab construction to actual wafer production, large-scale new supply is expected to be limited through 2028. Against that backdrop, the plan is to maximize supply capacity by combining the use of idle space at existing production hubs with the construction of new fabs.
The true battle for HBM supremacy between Samsung and SK hynix is expected to be decided in the market for the seventh-generation HBM4E, whose mass production is projected for next year. In particular, Samsung is reported to be moving up its mass-production shipment timeline after effectively clearing the final hurdle in HBM4E development.
Song Jai-hyuk, president, chief technology officer and head of Samsung Electronics’ semiconductor research center, said at an in-house management briefing in late June that HBM4E reliability-test yields had risen to 70% or higher, and that the company had also secured an edge over rivals in its next-generation seventh-generation (D1d) 10-nanometer-class DRAM process.
The industry typically regards yields of 80% or higher as the mark of production maturity, so surpassing 70% while still at the reliability-testing stage means development has entered a stable range.
Samsung had earlier sent 12-layer HBM4E samples to major customers in late May. The product is expected to be used in “Rubin Ultra,” the next-generation artificial intelligence accelerator that Nvidia plans to launch next year. An industry official said that as Samsung has preemptively raised its HBM4E yields as well, the supply-chain diversification calculations of major customers such as Nvidia have grown more complex, adding that the pace at which Samsung, which holds the production capacity, and SK hynix, which has held an edge in mass-production quality, expand supply in the fourth quarter will be the key variable shaping the market going forward.
Samsung Electronics’ HBM4E 12-layer sample. Photo courtesy of Samsung Electronics