A South Korean industry report has triggered a chain reaction across global markets, bringing concerns over the supply outlook for high-bandwidth memory chips to the forefront.
According to a South Korean media report on the 23rd, SK Hynix is slowing the pace of its mass-production expansion for the sixth-generation high-bandwidth memory chip (HBM4) and is reallocating resources back to the general-purpose DRAM market.
This news became the catalyst for a sharp correction in memory stocks. Bloomberg and CNBC both cited reports that "traders pointed to a South Korean media report – SK Hynix is slowing AI memory chip expansion and shifting focus back to general DRAM."
As memory stocks account for approximately 60% of the weighting in the Korea Composite Stock Price Index (KOSPI), the South Korean stock market subsequently plummeted over 10%, triggering a circuit breaker, with the panic sentiment then spreading to global markets.
The report cited a person familiar with SK Hynix's internal situation stating that, given the continuous downward revision of production forecasts for NVIDIA's next-generation "Rubin" chip, the company's management no longer sees a need to accelerate the production line conversion to HBM4. This statement cast doubt on the demand outlook for high-end AI infrastructure and put pressure on related supply chains including NVIDIA.
During Tuesday's U.S. trading session, Micron fell 13% and Western Digital fell 8.4%.
General DRAM Profitability Surpasses HBM, Prompting Resource Reallocation
The core logic of the South Korean media report lies in the changing profit structure within the memory market.
As of the first quarter of this year, the gap in operating profit margin between general-purpose DRAM and HBM had widened to over 15 percentage points, with general DRAM now holding the advantage. Daishin Securities estimates that the operating profit margin for general DRAM could theoretically reach a peak of 90% within the year.
Against this backdrop, SK Hynix is reportedly delaying plans to convert some of its fifth-generation HBM (HBM3E) production lines to HBM4 and is instead increasing its supply responsiveness to the general DRAM market. SK Hynix management has had to confront the reality that competitor Samsung Electronics is already reaping substantial profits from general DRAM.
In its first-quarter earnings report, SK Hynix also disclosed that DRAM average selling prices had risen to the mid-60% range and that it had signed a three-year DDR5 supply contract with Microsoft, which is widely interpreted by outsiders as a move by the company to secure long-term revenue visibility in the general DRAM field.
Wall Street Bullish on DRAM Cycle, Diverging Views on HBM Market Share
Analyses from several overseas investment banks corroborate the aforementioned strategic shift.
Goldman Sachs believes it is sufficient for SK Hynix to maintain a combined market leadership share of over 50% for HBM3 and HBM3E until at least 2026.
Morgan Stanley views the overall memory price cycle, rather than a market share battle for HBM, as the core driver for SK Hynix's valuation. Based on a forecast that DRAM average prices will rise 62% by 2026, the bank raised its profit forecast by 56% to 63%.
However, the slowdown in HBM4 expansion also opens a window for competitors.
According to Counterpoint Research data, SK Hynix's HBM market share was 57% in the fourth quarter of last year. But if Samsung Electronics successfully achieves HBM4 mass production in the second half of this year, SK Hynix's share could gradually narrow to the 50%–60% range.
Pressure Emerges in High-End AI Supply Chain, NVIDIA's Rubin System Under Scrutiny
The market volatility triggered by this report reflects investors' deeper concerns about the pace of high-end AI infrastructure build-out.
The informed source at SK Hynix explicitly mentioned in the report that production forecasts for NVIDIA's next-generation "Rubin" chip are being revised downward, a statement that directly impacted market expectations for robust HBM4 demand.
From a broader perspective, this development also aligns with the challenges in advancing high-end NVIDIA systems. The Vera Rubin rack equipped with HBM4 has seen overall costs pushed higher by significant memory price increases, putting pressure on the profit margins of hyperscale data center operators.
Whether SK Hynix's current slowdown in HBM4 expansion is a strategic choice for active pricing management or a signal of softening end-demand remains a point of market debate, but the global risk-aversion sentiment it triggered has already materialized.
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