[News] SK Hynix Reportedly Invests USD 1 Billion in Advanced Packaging to Strengthen HBM Chip Leadership

2024-03-08 Semiconductors editor

South Korean memory giant SK Hynix is significantly investing in advanced chip packaging, aiming to capture more demand for High Bandwidth Memory (HBM), a vital component driving the burgeoning AI market.

According to Bloomberg’s report, Lee Kang-Wook, currently leading SK Hynix’s packaging research and development, stated that the company is investing over USD 1 billion in South Korea to expand and enhance the final steps of its chip manufacturing process.

“The first 50 years of the semiconductor industry has been about the front-end, or the design and fabrication of the chips themselves,” Lee Kang-Wook expressed in an interview with Bloomberg. “But the next 50 years is going to be all about the back-end, or packaging.”

The same report further indicates that the packaging upgrade will help reduce power consumption, enhance performance, and maintain SK Hynix’s leadership position in the HBM market.

Recent market trends also highlight the crucial role of advanced packaging in the manufacturing of HBM products. According to a recent report by South Korean media DealSite, the complex architecture of HBM has resulted in difficulties for manufacturers like Micron and SK Hynix to meet NVIDIA’s testing standards.

The yield of HBM is closely tied to the complexity of its stacking architecture, which involves multiple memory layers and Through-Silicon Via (TSV) technology for inter-layer connections. These intricate techniques increase the probability of process defects, potentially leading to lower yields compared to simpler memory designs.

The reason lies in the lower yield of HBM chips compared to traditional memory chips. The complex stacking architecture of HBM involves multiple memory layers and Through-Silicon Via (TSV) technology for interconnecting layers, which increases manufacturing complexity. In the multi-layer stacking of HBM, if any of the HBM chips are defective, the entire stack will be discarded.

HBM, a type of DRAM primarily used in AI servers, is experiencing a surge in demand worldwide, led by NVIDIA. Moreover, according to a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 46-49%, while Micron stood at roughly 4-6%.

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(Photo credit: SK Hynix)

Please note that this article cites information from Bloomberg.