Key Takeaways
- SK Hynix overtook Samsung as South Korea's most valuable company after a 14-year bet on high-bandwidth memory chips
- The company nearly abandoned HBM development in the late 2010s after falling behind Samsung, but doubled down instead
- ChatGPT's 2022 launch triggered explosive demand for HBM chips, validating SK Hynix's early $640 million facility investment
SK Hynix has overtaken Samsung Electronics to become South Korea's most valuable company. The reversal caps 14 years of strategic bets on high-bandwidth memory chips that competitors dismissed as too niche to matter. SK Hynix is now Nvidia's primary HBM supplier, feeding the AI accelerators that power everything from ChatGPT to enterprise machine learning workloads.
The story starts in 2012, when SK Group acquired Hynix Semiconductor. Standard & Poor's slapped SK Telecom with a negative outlook, warning about the semiconductor industry's cyclical nature and capital demands. Samsung, then worth more than ten times SK Hynix, dominated the DRAM market that powered laptops and smartphones.
Why did SK Hynix bet on HBM instead of competing in DRAM?
SK Hynix knew it couldn't beat Samsung at commodity DRAM. "We believed that it would be impossible to overcome Samsung in commodity DRAM products," said Hyun Sun-yeop, a former SK Hynix HR executive. "We were desperate to change the market dynamics. We needed a breakthrough."
HBM stacks memory dies vertically, connecting them through thousands of tiny wires called through-silicon vias. This architecture delivers dramatically higher bandwidth and better energy efficiency than traditional memory. At the time, few data center customers wanted it.
SK Hynix released the world's first HBM product with AMD in 2014. But the second generation stumbled. By the late 2010s, Samsung had pulled ahead, and SK Hynix executives debated whether to kill HBM development entirely.
The $640 million gamble that almost backfired
Instead of retreating, SK Hynix doubled down. Executives revamped their technology and poured 880 billion won ($640 million) into a packaging facility in Icheon. They expected growing demand from Nvidia, then known primarily as a supplier of 3D graphics chips for gaming.
The bet looked disastrous at first. By 2019, the Icheon facility was underutilized as demand from Nvidia and cryptocurrency miners collapsed. Shim Dae-yong, who led HBM development at SK Hynix, called it "a headache" and "obsolete."
“No one expected the HBM market would post such explosive growth. But we were ready in terms of performance and capacity.”
— Shim Dae-yong, former SK Hynix HBM development leader
How ChatGPT changed everything for HBM
OpenAI released ChatGPT in November 2022. The AI boom that followed transformed HBM from a specialty product into the most critical component in Nvidia's AI accelerator supply chain. Training and running large language models requires moving massive amounts of data at speeds that only HBM can deliver.
SK Hynix was ready. The company now holds an estimated 90% market share in HBM chips for AI accelerators. Its early investment in production capacity meant it could scale while competitors scrambled to catch up.
The financial turnaround was stark. In 2023, a severe memory industry downturn pushed SK Hynix to report an operating loss of 7.73 trillion won. In 2024, it posted a record operating profit. By early 2025, it briefly overtook Samsung as the world's top DRAM maker.
What does this mean for Samsung?
Samsung has struggled to qualify its HBM chips with Nvidia. While South Korea's stock market volatility briefly dropped SK Hynix's market cap below Samsung's recently, the strategic gap is clear. SK Hynix owns the relationship with the customer that matters most for AI infrastructure.
"No one would ever have imagined that SK Hynix would overtake Samsung," said Shin Jae-yong, a business administration professor at Seoul National University. "It is almost impossible for a runner-up to catch up with the market leader in this capital-intensive industry, which requires massive investment."
SK Group Chairman Chey Tae-won explained his original vision in a book published in January 2025: "What I really wanted to accomplish when we acquired Hynix was to transform it from a commodity memory producer into a mainstream semiconductor company whose products are indispensable."
The underdog advantage
HBM wasn't just a product bet. It represented a strategic escape from the commodity trap that had nearly bankrupted Hynix multiple times. Founded in 1983 as Hyundai Electronics, the company flirted with bankruptcy in 2001 when chip prices collapsed. Creditor banks rescued it, then tried to sell it to Micron Technology in 2002. Micron's bid was rejected by the board.
The company's crisis-ridden history created a culture willing to take risks that a comfortable market leader wouldn't. When the AI wave hit, that willingness to bet on a niche product proved more valuable than Samsung's dominance in traditional DRAM.
Logicity's Take
SK Hynix's victory illustrates a pattern worth studying: market leaders optimize for current demand, while challengers sometimes stumble into the next demand cycle by necessity. Samsung's HBM troubles aren't about engineering capability. They're about organizational attention. When you dominate a market, experimental products get fewer resources and less executive focus. Micron, the third major player, is also pushing aggressively into HBM but faces the same qualification hurdles with Nvidia. For enterprises building AI infrastructure, the practical implication is clear: HBM supply constraints will remain a bottleneck through at least 2025, affecting GPU availability and pricing.
Frequently Asked Questions
What is HBM and why does it matter for AI?
High-bandwidth memory stacks memory dies vertically and connects them with thousands of through-silicon vias. This delivers dramatically higher bandwidth than traditional DRAM, which is critical for AI accelerators that must process massive datasets quickly.
How much of the HBM market does SK Hynix control?
SK Hynix holds an estimated 90% market share in HBM chips for AI accelerators, making it Nvidia's primary supplier.
Why is Samsung struggling with HBM?
Samsung has had difficulty qualifying its HBM chips with Nvidia. While Samsung has the engineering capabilities, it focused resources on commodity DRAM where it already dominated, leaving SK Hynix to build deeper expertise in HBM over 14 years.
Is SK Hynix still more valuable than Samsung?
Market volatility has caused SK Hynix's market cap to fluctuate above and below Samsung's. As of the most recent trading, the two companies trade close in value, though SK Hynix briefly claimed the top spot in 2025.
Who else makes HBM chips?
Samsung and Micron Technology are the other major HBM manufacturers. Both are working to qualify their chips with Nvidia but have faced delays compared to SK Hynix's established position.
Need Help Implementing This?
If you're planning AI infrastructure investments and need to understand memory constraints, GPU availability, or vendor roadmaps, Logicity's research team can help. Contact us for enterprise briefings on semiconductor supply chain dynamics affecting your AI strategy.
Source: Tech-Economic Times / ET
Manaal Khan
Tech & Innovation Writer
Produced with AI assistance and reviewed by the Logicity editorial team. Learn more in our Editorial Policy.
