SK hynix, TSMC form AI chip alliance: Sources

[Courtesy of SK hynix]

South Korean chipmaker SK hynix Inc. is forming an alliance with Taiwan Semiconductor Manufacturing Co. (TSMC) to boost the duo’s artificial intelligence (AI) partnership.

SK hynix emerged as a strong player in the high-bandwidth memory (HBM) market amid generative AI’s increasing popularity, while TSMC is the world’s largest semiconductor foundry. The strategic alliance aims to consolidate the two companies’ positions in the AI chip market by pooling their technical expertise in next-generation AI semiconductor packaging.

The AI semiconductor alliance is interpreted as a move to build a united front against Samsung Electronics Co.

According to industry sources on Wednesday, SK hynix formed a One Team strategy with TSMC, including collaboration on the development of sixth generation HBM, known as HBM4.

Both companies are enhancing their influence in the AI chip market, competing alongside Nvidia Corp.

TSMC dominates the market by manufacturing Nvidia’s graphics processing units (GPUs) while SK hynix has gained over half of the market share in the HBM market, which supports GPU computations.

Observers speculate that the collaboration between the two companies will involve TSMC handling some processes for HBM4, considered the next generation of HBM, which could significantly improve compatibility compared to existing products.

“The collaboration between SK hynix and TSMC is expected to be a driving force in the growing AI semiconductor market,” Korea Semiconductor Industry Association executive director Ahn Ki-hyun said.

For its part, SK hynix noted that it “cannot confirm any details related to its partner.”

The collaboration is also seen as an effort to counteract Samsung Electronics.

Having experienced the worst semiconductor downturn in 2023, Samsung Electronics is known to have lagged both SK hynix and TSMC in the AI chip sector due to delayed decision-making in business strategies.

Samsung Electronics competes with TSMC in the foundry market and with SK hynix in the memory chip market. After falling behind in HBM3, Samsung Electronics aims to reverse the situation in the HBM4 market by establishing a turnkey strategy.