High-bandwidth memory is the part of an AI system that nobody photographs. It sits next to the processor and feeds it data, and if it is too slow the expensive chip waits.
It is made by stacking ordinary DRAM, the same memory that goes into laptops and phones. That is why an AI buildout drains the supply of consumer memory: the stacks eat it.
Three companies make almost all of it. SK Hynix held 58% of the HBM market in the first quarter, with Samsung and Micron on 21% each, according to Counterpoint Research figures cited by CNBC.
SK Hynix now says it will spend $720bn building what it calls the largest network of memory factories in the world.
A fab the height of a 50-storey block
CNBC became the first broadcaster allowed to film inside the Yongin Cluster, where the first of four planned fabs is going up. Production is due to start in February.
The building is the tell. Korean fabs go up rather than out, because the terrain gives them no choice. This one will reach the height of a 50-storey apartment block and hold six cleanrooms stacked over several floors.
Compare that with the single-storey sprawl TSMC and Intel are building in Arizona. The engineering is a response to geography, and it is also a lot more concrete per wafer.
SK Hynix is expanding at Cheongju too, where it is putting up a NAND factory as well.
The market thinks the peak is already behind
Here is the part CNBC’s tour does not dwell on. Investors have spent two months deciding this boom is over.
From their June highs, SK Hynix and Samsung shares have fallen roughly 50% and 34% respectively, Bloomberg reported. Both companies posted record earnings in that window.
The US listing tells the same story on a shorter clock. SK Hynix listed on the Nasdaq in July, and the shares are down about 21% from their high of nearly $195 on 14 July.
Memory stocks do not need prices to fall in order to weaken. They need the rate of increase to slow, and that is happening. TrendForce expects conventional DRAM contract prices to rise 58% to 63% in the second quarter, then just 13% to 18% for server DRAM in the third.
The company’s answer has been cash. SK Hynix has set a third-quarter timeline for shareholder returns, and Samsung is expected to follow.
Why it is building anyway
The case for spending through a downturn rests on contracts. SK Hynix reported 10 long-term supply agreements in July, a structure that barely existed when memory was treated as a commodity.
Samsung expects multi-year deals to cover 60% to 70% of planned capacity eventually. Micron had 16 such agreements at the end of June.
Nvidia went furthest. It secured HBM supply and agreed to co-develop next-generation memory as part of a $500bn arrangement with SK Group that also covers new data centres with SK Telecom by 2027.
SK Group chairman Chey Tae-won argues the product itself has changed. “Nvidia wants their own custom chips and Google wants their own customized HBM, so it’s not just a commodity,” he told CNBC. “It actually changes the memory chip’s status.”
‘Please make more’
Chey showed CNBC a wafer carrying a handwritten message from Nvidia chief executive Jensen Huang. It read: “Please make more.”
“It’s like a war,” Chey said of the demand. “Everybody wants to buy the memory chips. Without that, they cannot produce their AI computing and AI chips.”
He also conceded the obvious. Prices “went up too fast”, he said, and he is trying to fix it.
The scramble is visible from the car park. Counterpoint research director MS Hwang said every hotel near the Korean memory fabs is fully booked. “If you name any company in Big Tech, they are all in Korea to sign a contract,” he said.
It is quietly trying to sell a Chinese plant
One thread runs against the expansion story. SK Hynix is weighing a sale of its packaging plant in Chongqing, the South China Morning Post reported.
The company said on Monday it was “looking into various solutions to enhance the competitiveness of its packaging business”. Analysts read it as a pivot towards higher-margin AI memory, while warning that valuation and the chip cycle make a sale awkward.
The politics are simpler. SK Hynix runs three fabs in China but cannot sell leading-edge HBM there, because US export controls forbid it.
China is building its own. CXMT made a Shanghai debut that valued it above every other Chinese-listed company. Hwang called China “the counterparty of the race” and said it is more dangerous than anything else in the world.
The state is pushing from behind
None of this is purely commercial. President Lee Jae Myung set out a plan in June to double South Korea’s memory production within five years, with a chip support package worth at least $22bn.
Samsung is building to the same brief, including its own Yongin fab on the same site cluster. The two rivals are now the load-bearing wall of the Korean market, which draws about half its value from them.
The Americans are spending too. Micron is putting $50bn into two fabs in Idaho and up to $100bn into a New York campus.
SK Hynix’s own American plant is smaller than the headlines suggest. Its $4bn site in Indiana, finishing in 2028, does packaging rather than front-end manufacturing. Chey said he has spent more than a month studying locations for a real fab and has not found one.
Europe is absent from this entirely
Worth stating plainly. Every company named above is Korean, American or Chinese.
Europe builds AI data centres and finances AI startups, and it buys every byte of the memory inside them from somewhere else. There is no European name anywhere near the HBM market.
What would settle it
Two things are checkable. The first is whether the Yongin fab actually starts production in February, because a slip would say more about the cycle than any share price does.
The second is the Chongqing sale. A company committing $720bn to memory does not usually sell a memory plant, and what it gets for that one will show whether this is a pivot or a retreat.
Chey has a wafer on his desk asking him to make more. The market is quietly telling him the opposite.
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