SK Hynix Partners with Naver Cloud for 'Second HBM' Development as Korean AI Memory War Intensifies

South Korean technology giants are engaged in a fierce competition to dominate the artificial intelligence era, with memory semiconductor companies leading the charge in developing next-generation AI infrastructure. The latest development sees SK Hynix, the world's second-largest memory chipmaker, partnering with Naver Cloud Platform to develop what industry experts are calling the "second HBM" - a next-generation AI memory solution that could reshape the global semiconductor landscape.

For American readers unfamiliar with the Korean semiconductor ecosystem, SK Hynix operates similarly to Micron Technology in the U.S., but with a stronger focus on high-bandwidth memory (HBM) products essential for AI applications. Meanwhile, Naver Cloud Platform functions as Korea's equivalent to Amazon Web Services, providing cloud computing services across Asia. This partnership represents a strategic collaboration between hardware and software companies to optimize AI memory performance in real-world data center environments.

The memorandum of understanding (MOU) signed on September 9th establishes a framework for joint performance evaluation and optimization of AI solution products used in actual data centers. This goes beyond a traditional supplier-customer relationship, creating a strategic partnership aimed at accelerating the practical validation and commercialization of AI memory technologies. The collaboration will focus on testing and refining memory solutions under real-world conditions, addressing the growing demand for more efficient AI infrastructure.

SK Hynix's Dominance in the HBM Market

SK Hynix's technological prowess in HBM is already yielding impressive financial results. According to Counterpoint Research, the company achieved a historic milestone in Q1 2025 by surpassing Samsung Electronics to claim the top spot in global DRAM market revenue for the first time, capturing 36% market share. This achievement is particularly remarkable considering the competitive dynamics in the memory industry, where Samsung has traditionally held the leading position.

The profitability metrics of HBM reveal why this technology has become so crucial for Korean semiconductor companies. While HBM accounts for only 14% of SK Hynix's total DRAM shipments by volume, it generates an astounding 44% of DRAM revenue and 54% of operating profit. For American investors familiar with the semiconductor sector, this represents profit margins comparable to those achieved by NVIDIA in the GPU market - demonstrating the premium value of AI-specialized memory products.

This success directly correlates with the explosive growth in AI data centers. As generative AI services like ChatGPT become mainstream, the demand for high-bandwidth memory that can keep pace with advanced GPUs has skyrocketed. NVIDIA's next-generation GPUs, which power most AI training and inference workloads, require specialized memory solutions like HBM to achieve optimal performance. This positions SK Hynix as a critical supplier in the global AI infrastructure supply chain, similar to how Intel became essential for personal computing in previous decades.

Massive Investment Expansion for 2025

The Korean memory semiconductor industry is responding to the AI supercycle with unprecedented capital investments. Industry forecasts predict that global DRAM investment will surge by 54% year-over-year in 2025, while NAND flash investment is expected to increase by 14%. These investment levels exceed those seen during previous technology cycles, reflecting the industry's confidence in sustained AI demand growth.

SK Hynix's strategic expansion includes the completion of its Cheongju M15X fabrication facility in November, with a total design capacity of 90,000 wafer starts per month. The company plans equipment orders of 10,000 wafers this year and 60,000 wafers next year, with full ramp-up expected in 2026. This expansion will significantly strengthen the company's ability to meet HBM4 demand, positioning it to capture the next wave of AI infrastructure growth.

From a technological innovation perspective, SK Hynix continues to push boundaries in memory efficiency. The company has implemented advanced MR-MUF (Molded Underfill) technology in its HBM products to improve heat dissipation and stability - critical factors for AI workloads that generate significant thermal loads. Recent developments include HBM4 samples with improved base die performance and power efficiency, addressing the growing concern about energy consumption in AI data centers.

Korea's Position in the Global AI Ecosystem

Major international technology events like CES 2025 and Intel AI Summit Seoul 2025 have highlighted Korea's emerging leadership in AI technology. Samsung Electronics, LG Electronics, and SK Group have all unveiled comprehensive AI business visions, establishing consensus that Korea cannot afford to fall behind in AI industry competition. This unified approach resembles how American technology companies rallied around internet technologies in the 1990s, recognizing that leadership in foundational technologies determines long-term competitive advantage.

SK Chairman Chey Tae-won emphasized the strategic importance of AI competition, stating that "falling behind in AI competition will threaten the competitiveness of all industries we have been proud of, including semiconductors, shipbuilding, and steel." This statement reflects Korea's understanding that AI represents a platform technology that will reshape every industry, similar to how the internet transformed business models across sectors in the United States.

LG AI Research has set an ambitious but achievable goal of becoming the world's third-largest AI company. Director Lee Hong-rak of LG AI Research expressed confidence, noting that "excluding the United States and China, there aren't many countries competing in the top tier. The UK, France, and Singapore are also in the mix, but Korea is not lagging behind." This positioning strategy acknowledges American and Chinese dominance while carving out a leadership position among other advanced economies.

Market Outlook and Strategic Challenges

Despite the rapid growth in AI memory markets, industry experts caution about structural risks that could impact future performance. Potential challenges include U.S. tariff impacts, China's semiconductor capacity expansion, and intensifying industry competition that could slow high-value market growth faster than anticipated. These concerns echo those raised by American semiconductor analysts regarding oversupply risks in previous technology cycles.

The 2026 memory market outlook requires careful evaluation, as excessive optimism could lead to overcapacity and pricing pressure. However, several factors support continued growth: the ongoing expansion of AI applications beyond chatbots into autonomous vehicles, robotics, and industrial automation; increasing adoption of AI by enterprises across all sectors; and the development of more sophisticated AI models requiring even more memory bandwidth.

The competitive landscape also continues evolving, with Samsung Electronics developing comprehensive semiconductor solutions and partnerships like the SK Hynix-Naver Cloud collaboration creating new innovation models. These developments suggest that Korean companies are not just competing on manufacturing efficiency but are building integrated ecosystems that could provide sustained competitive advantages.

Looking ahead, the success of these technological innovations and ecosystem collaborations will likely determine whether Korea can establish a more dominant position in the global AI semiconductor market. The combination of SK Hynix's HBM technology, Samsung's comprehensive semiconductor solutions, and platform companies like Naver Cloud creates a foundation for Korea to lead AI infrastructure development. If these collaborative efforts continue and expand, Korea is well-positioned to secure an even stronger foothold in the global AI semiconductor market, potentially establishing itself as the world's primary supplier of AI memory solutions.

Source: Read the original Korean article