SK Hynix likely unseated Samsung as Dram leader with AI boost

SK Hynix’s upcoming earnings results will likely show it replaced Samsung Electronics as the world’s top Dram vendor for the first time in the two companies’ decades-long rivalry, thanks to demand for artificial intelligence (AI).

SK Hynix, a key supplier of high-bandwidth memory (HBM) to Nvidia, captured 36 per cent of the Dram market in the March quarter, compared with Samsung’s 34 per cent, data from Counterpoint Research show. This comes just after the operating profit at Samsung, which held the Dram crown for more than 30 years, fell below SK Hynix’s for the first time in the December quarter.

“It’s another wake-up call for Samsung,” said MS Hwang, research director at Counterpoint Research in Seoul. SK Hynix’s lead in HBM chips, used for AI, likely comprised a bigger part of the company’s operating income during the period, he said.

Dram, or dynamic random access memory, is a type of memory most commonly used to process data in computers and servers. HBM chips are made up of Dram dies stacked on top of each other, which boosts the amount of data they can handle and are crucial for hardware such as Nvidia’s graphics accelerators to train AI models.

On Thursday, SK Hynix is projected to report a 38 per cent quarterly rise in sales and a 129 per cent surge in operating profit in the three months to March, according to analysts polled by Bloomberg.

The Icheon, South Korea-based company further widened its lead in HBM, commanding 70 per cent of the market in the first quarter, Hwang said. Taipei-based research firm TrendForce forecasts SK Hynix will hold on to more than half of the HBM market in terms of gigabit shipments in 2025, with Samsung’s share falling to just under 30 per cent and Micron Technology gaining ground to almost 20 per cent.

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The memory market faces challenges stemming from US tariffs, export restrictions to China and the growing fears of recession, however.

“Earnings season won’t matter with larger forces at work,” Morgan Stanley analysts led by Shawn Kim said in a note to investors. “The real tariff impact on memory resembles an iceberg, with most danger unseen below the surface and still approaching.”

With HBM at greater risk from any slowing in chip packaging capacity growth, Samsung is their top pick, they said. “It can better withstand a macro slowdown, is priced at trough multiples, has optionality of future growth via HBM, and is buying back shares every day,” the said.

Samsung earlier this month reported a preliminary operating profit of 6.6 trillion won (S$6 billion) on revenue of 79 trillion won. The company will provide a full financial statement with net income and divisional breakdowns on Apr 30. BLOOMBERG