SK hynix Sees Demand Outstripping Supply Through 2030 as HBM4 Gains Ground
Key Facts
SK hynix expects memory demand to remain above supply through 2030, signaling continued pressure on supplies in the AI chip market. The company said the complexity of advanced manufacturing processes and the long time needed to build new production facilities would keep the gap in place. The outlook puts growing demand for high-bandwidth memory at the center of the company's plans, as cloud providers seek to secure supplies. For the third quarter, the company reported revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won. Net profit was 39.7756 trillion won, while revenue and operating profit rose 32% and 38%, respectively, from the previous quarter.
SK hynix said shipments of HBM4 had begun to expand and that it expects this generation to exceed HBM3E in shipment volume and revenue in the fourth quarter of 2026. The company therefore expects HBM4 to become its main product during that period, as demand shifts to a newer generation of memory used in AI systems. The transition comes as the company expects demand to continue exceeding supply for years, making production increases and their timing key to meeting customer needs. The company did not provide specific figures for HBM4 shipment volume or revenue in the available statement. It did, however, identify the fourth quarter as the expected point when the new product would surpass its predecessor on both measures.
In response to demand, the company said it had signed long-term supply agreements with 14 major customers, including global cloud service providers. These contracts typically run for five years, according to the company's announcement in October 2026. The agreements give the company and its customers a longer time frame for supply planning as SK hynix expects demand to remain above supply. The company also links its market outlook to the difficulty of rapidly expanding production capacity because of the complexity of advanced processes and the time required to build new facilities. The information provided did not disclose the memory volumes covered by each contract or delivery schedules for individual customers.
The partnership between OpenAI and Samsung and SK dates to an announcement on 1 October 2025 under the Stargate initiative. OpenAI said at the time that the partnerships aimed to increase supplies of advanced memory chips and expand data center capacity in Korea. Samsung and SK hynix also aimed to reach 900,000 DRAM wafer starts per month as part of an accelerated capacity rollout, according to OpenAI's announcement. This places the companies' cooperation in the context of AI projects seeking to combine memory supplies with data center infrastructure. Details of Sam Altman's meeting with the chairman of the SK Group were not disclosed, and industry officials said they believed the talks had covered existing projects such as HBM supplies and data centers.
The momentum in AI chips coincided with slower growth in South Korea's factory activity in October. The purchasing managers' index came in at 51.3, down from 53.9 in September and its weakest reading since February. Even so, the index remained above the 50 threshold separating expansion from contraction for the eleventh consecutive month. Companies taking part in the survey said weak demand, shortages of raw materials and higher costs weighed on performance, while output growth was the weakest of the year to that point. The contrast between continued industrial expansion and October's slowdown comes as South Korea's exports and investment depend on the AI chip boom.
South Korea's economy grew 1.0% in the third quarter, beating market expectations, Reuters reported, as the AI chip boom supported exports and investment. In the memory sector, Samsung posted record operating profit of 107.4 trillion won in the previous quarter, according to the company's announcement on 29 October, attributing it to strong demand for memory chips used in AI systems. SK hynix's U.S.-listed shares also rose 12.2% in the 28 October session after the company reported a sharp rise in quarterly profit driven by demand for AI infrastructure. These figures provide context for the bet on sustained demand, alongside SK hynix's forecast that supply will remain below demand through 2030. The company will see a practical test of that outlook in the fourth quarter as HBM4 moves into the main-product position under its plan.