According to BusinessKorea, SK Hynix has increased the price of its sixth-generation high-bandwidth memory (HBM4) supplied to Nvidia, the world's largest artificial intelligence (AI) semiconductor company, by more than 50% compared to its predecessor (HBM3E), further solidifying its leading position in the global HBM market. The company has reached an agreement with Nvidia on the supply of HBM4 next year, paving the way for record-breaking performance.

The report states that SK Hynix delivered the world's first 12-layer stacked HBM4 sample to Nvidia in March this year, receiving positive feedback, and subsequently began small-batch shipments in June. At the same time, the two companies negotiated the supply price of HBM4 required for Nvidia's next-generation AI chip "Rubin," scheduled for release in the second half of next year.

The HBM4 has 2,048 data transfer channels (I/O), twice that of the HBM3E (1,024). Furthermore, HBM4 integrates "logic process" functions such as computing efficiency optimization and energy management into the base die connecting the graphics processing unit (GPU) and HBM. For this reason, SK Hynix outsourced the production of the base die to TSMC starting with HBM4, whereas previously this step was done in-house.

Considering the costs involved in the technology upgrade, SK Hynix proposed a unit price of around $550 for HBM4 to Nvidia, more than 50% higher than HBM3E. Nvidia, considering that Samsung Electronics and Micron would also be supplying HBM4 on a large scale, had reservations about such a significant price increase, leading to a disagreement between the two parties.

Ultimately, the two parties reached an agreement, setting the supply price of HBM4 at approximately $560 per unit (approximately RMB 3989 at the current exchange rate). Nvidia largely adopted SK Hynix's offer, allowing it to maintain its dominant position in the HBM4 market. An SK Hynix executive stated, "The final supply price and negotiation details cannot be confirmed," but added, "Considering process advancements and rising raw material costs, there are reasonable factors for a significant price increase in HBM4."

Following the completion of price negotiations, SK Hynix recently held an investor relations (IR) meeting for institutional investors, expecting to maintain a high operating profit margin next year. According to sources in the financial investment industry, SK Hynix stated, "The price and supply of products conforming to Nvidia specifications have been determined, and 'current profitability' can be maintained." This means that even if Samsung Electronics and Micron enter the HBM4 market, it will not adversely affect the company's operating profit and overall performance.

Industry estimates suggest that SK Hynix's operating profit margin for HBM4 products is approximately 60%. The market expects SK Hynix's HBM sales next year to reach approximately 40-42 trillion won (IT Home note: approximately 208.404 billion yuan at the current exchange rate). If SK Hynix maintains a profit margin similar to this year, the HBM business alone will contribute approximately 25 trillion won (equivalent to approximately 124.05 billion yuan at the current exchange rate) in operating profit. With SK Hynix fully transitioning from its current flagship product, HBM3E, to HBM4 in the second half of next year, its overall HBM performance is expected to increase by 40%–50% compared to this year (sales of approximately 30 trillion won and operating profit of approximately 17 trillion won).

Furthermore, some forecasts indicate that, thanks to the already secured high profitability of HBM4, SK Hynix's overall operating profit next year is expected to exceed 70 trillion won. This is not only due to the HBM business but also to the soaring prices of general-purpose DRAM products such as Graphics Double Data Rate (GDDR) and Low Power (LP) DDR—driven by the global AI infrastructure investment boom, general-purpose DRAM prices continue to rise. According to DRAMeXchange data, the fixed trading price of DDR4 broke through $7 in six years in September, mainly due to the continued tight supply of general-purpose DRAM caused by major memory chip manufacturers prioritizing HBM production lines in recent years.

With the continued rise in DRAM prices, analysts believe that SK Hynix's operating profit margin for its general-purpose DRAM business may approach 50%–60% next year. An industry insider pointed out, "With the rapid expansion of the inference AI market, the supply of memory chips will be unable to meet the surging demand in the short term," adding, "SK Hynix has already sold out its capacity for next year even before production has started, so the high profit margin will continue."