Kwak Noh-jung, CEO of SK hynix, speaks during a press conference at the company's headquarters in Icheon, Gyeonggi Province, Thursday. Courtesy of SK hynix

ICHEON, Gyeonggi Province — SK hynix is cementing its leadership in AI chips as it has sold out all of this year's production of high bandwidth memory (HBM) chip, an AI semiconductor, and is nearly sold out relative to production capacity for next year, CEO Kwak Noh-jung said Thursday.

"Currently, AI services are centered on data centers, but in the future, they are expected to rapidly expand to on-device AI such as smartphones, PCs and cars. This will lead to an explosive increase in demand for high-speed, high-capacity and low-power memory chips specialized for AI," Kwak said during a press conference at the company's headquarters in Icheon, south of Seoul.

"Our company has secured the industry's top technology in each product, including HBM, TSV (through silicon via)-based high-capacity DRAM and high-performance eSSD (enterprise SSD). We will offer the world's best customer-customized memory solutions through strategic collaboration with global partner companies," the CEO added.

The demand for HBM chips, which can process data quickly, has significantly increased since generative AI services like OpenAI's ChatGPT began to spread globally last year. SK hynix is leading the high-performance DRAM chip market with more than half the market share last year.

"As for our HBM products, in terms of production, they have already sold out for this year, and next year is almost the same," Kwak said.

To further solidify its technology leadership, SK hynix plans to provide sample products of the 12-layer HBM3E, the fifth-generation HBM, to customers in May and start mass production in the third quarter, said the CEO.

The chief also credited the high presence of SK hynix in the AI memory chip field to the bold investment decisions and global networking abilities of SK Group Chairman Chey Tae-won because the competitiveness of its AI memory chip is not achieved overnight but through a process of technology development supported by steady investment.

HBM products, which have strong customer-specific features different from conventional memory chips, require widespread use by customer companies, which was made possible due to Chairman Chey's strong networking with global partners.

"SK hynix was incorporated into SK Group in 2012, and at that time, the memory market was not in good condition, and most chip makers reduced their investments by over 10 percent. But SK Group decided to make substantial investments, boosting morale among its members," Kwak said. "The decision to increase investment was made across all areas, including HBM, which had an uncertain future at that time. As a result, we were able to develop the industry's first HBM in 2013."

"Considering this, Chairman Chey's global networking has established a collaborative relationship with each customer and partner companies, playing a decisive role in securing AI semiconductor leadership," the CEO added.

Revealing its market view this year, SK hynix is quite optimistic about the memory market as a whole, not just HBMs.

"From the second half of the year, we expect demand from PCs and mobile devices mobile to improve. Price negotiations and volume negotiations are not as bad as we thought. The situation continues to be favorable for suppliers, and we think the market is quite positive this year," Kim Ju-seon, president of AI Infra at the company, said.