"China Eyes HBM Too"... How Samsung and SK Can Maintain Their Lead Despite the Chase [Chip Talk]

Chinese Offensive Intensifies Amid Semiconductor Super-Cycle

Samsung Responds with Overwhelming Speed and Volume

SK hynix Cements Memory Leadership Through Enhanced Packaging

Unified Call for Bold Investment and Technological Innovati

With the demand for artificial intelligence (AI) memory surging, especially for high-bandwidth memory (HBM), Samsung Electronics and SK hynix are making all-out efforts to secure market leadership. Samsung Electronics is betting on accelerating both production speed and volume through the early construction of Pyeongtaek Campus Plant 5 Fab 2 and its "twin fab" strategy, while SK hynix is seeking to strengthen its competitiveness in packaging and testing by expanding its back-end processing facilities.

Despite expanded investments by the two domestic memory giants, there is growing concern in the industry that they cannot afford to let their guard down, as Chinese memory companies are also entering the market amid an unprecedented memory boom. Experts emphasize that aggressive investment and technological innovation are necessary to maintain a significant competitive edge.

Samsung Shouts "More and Faster"... 7th-Generation HBM Supply Coming Soon

Samsung Electronics believes that now, during this strong business period, is the time to invest for a technological lead. Although Samsung Electronics appeared to be trailing SK hynix in the HBM competition, it succeeded in the world’s first mass production and shipment of sixth-generation HBM4 in February and is proceeding with capacity expansion as planned. In the second quarter, Samsung plans to provide samples of the seventh-generation HBM (HBM4E), supporting 16Gbps per pin and a bandwidth of 4.0TB per second, to major customers.

Samsung is also accelerating large-scale capacity expansion. The company has advanced the groundbreaking for P5 Fab 2, the final production line at the Pyeongtaek Campus in Gyeonggi Province, by about six months, from early next year to July this year. The target operation date is 2029. Notably, this plant will be constructed as a "twin fab" with the same structure as the existing P5. Normally, if a semiconductor production line’s design changes, customers must re-verify yield and quality over several months. However, with the same fab structure, much of this process can be omitted. As supply speed has become critical in the semiconductor market, Samsung aims to reduce verification procedures and quickly boost supply.

SK hynix to Solidify "Packaging Leadership" with 19 Trillion-Won Investment

While Samsung Electronics is betting on overwhelming speed and volume, SK hynix is pouring its efforts into enhancing advanced packaging and quality competitiveness.

SK hynix recently broke ground on "P&T7," a dedicated advanced packaging production base in Cheongju, North Chungcheong Province, with an investment of about 19 trillion won. This facility will be responsible for back-end processes, packaging semiconductor chips into final products and performing final quality verification.

The cleanroom for the first fab in the Yongin Cluster, which will be the core production base for sixth-generation (1c) DRAM, is also scheduled to open in February next year, three months earlier than originally planned. By securing 1c DRAM production capacity early—which will serve as the foundation for improved HBM4E products—SK hynix aims to maintain its technological leadership.

"China Could Catch Up in 2-3 Years... Halting Investment Would Undermine the Lead"

Despite such investment expansion, experts unanimously say that much more aggressive and preemptive measures are needed to fend off China’s pursuit. Chinese memory semiconductor leaders Changxin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) are accelerating their chase of domestic memory firms by expanding their HBM production capabilities in addition to general-purpose DRAM.

CXMT, which operates three 12-inch wafer plants in Hefei and Beijing, is introducing equipment to its Shanghai plant in the second half of this year to respond to growing memory demand. Once completed, its production capacity is expected to reach two to three times that of the Hefei plant. CXMT is expanding not only general-purpose DRAM but also HBM lines, which have been dominated by Samsung Electronics and SK hynix.

YMTC is constructing its third NAND flash plant in Wuhan, aiming to start operations next year, and is also seeking to produce HBM. Last month, reports emerged that two additional factories would be built.

Professor Lee Jonghwan of the Department of System Semiconductor Engineering at Sangmyung University said, "It will take at least another two to three years for Chinese semiconductor companies to catch up to Samsung Electronics and SK hynix," adding, "There is still a technological gap." However, he stressed that continuous technological development and bold investment are essential to maintain this gap. "The key to semiconductor competitiveness is improving yield," he said, emphasizing, "We must continuously increase yield by developing next-generation technologies."

He also argued that Korean companies should actively compete for leadership not only in the memory chip market but also in the foundry (contract manufacturing) sector. Professor Lee explained, "Although Samsung Electronics is currently experiencing internal difficulties such as strikes, it must increase production volume to narrow the gap with TSMC as it continues to expand its customer base."

Professor Lee also mentioned the role of the government in supporting the industrial ecosystem. He stated, "Continuous support is needed for startups and companies specializing in materials, components, and equipment," adding, "A robust ecosystem is ultimately what will enable Samsung Electronics and SK hynix to strengthen their competitiveness."

This content was produced with the assistance of AI translation services.