SK Hynix slows HBM4 production to boost DRAM profits

SK Hynix, the company that supplies roughly half the world’s high-bandwidth memory chips, is making a counterintuitive move. Instead of racing to ramp up its next-generation HBM4 production, it’s deliberately slowing down to redirect resources toward conventional DRAM, where supply shortages have made margins surprisingly juicy.

The numbers behind the pivot

To understand why SK Hynix would slow down production of its most celebrated product, you need to look at the math. The company posted a record Q1 2026 operating profit of KRW 37.61 trillion, with an operating margin of 72%. All of SK Hynix’s 2026 HBM supply was reportedly already sold out earlier this year. When your product is completely spoken for, there’s limited upside to pushing production even harder, especially when the supply-demand imbalance in a different product category is screaming for attention.

Conventional DRAM, which SK Hynix had previously deprioritized in favor of HBM, is now experiencing acute shortages. The company had earlier slowed investments in its 1c DRAM node specifically to funnel resources into HBM, which was generating margins three to five times higher at the time.

A semiconductor market under pressure

SK Hynix Chairman Chey Tae-won flagged this problem back in March 2026, warning that wafer shortages may persist until 2030. SK Hynix holds an estimated 50-60% market share in the HBM segment, a dominant position built through years of aggressive investment and close partnerships with AI chip designers like Nvidia. Every wafer dedicated to HBM is a wafer not making conventional DRAM. When DRAM margins were unremarkable, that trade-off was obvious. Now that shortages have pushed DRAM profitability into attractive territory, the calculus has changed.

What this means for the competitive landscape

The most immediate beneficiary of this shift could be Samsung. SK Hynix’s decision to ease its HBM4 ramp gives Samsung, which has been playing catch-up in the HBM space, a window to close the gap. Samsung has struggled with yield issues and qualification delays for its own HBM products.

The risk is that slowing HBM4 gives competitors not just Samsung but also Micron a chance to gain ground in a segment where SK Hynix has enjoyed a comfortable lead. Deliberately ceding that first-mover advantage, even temporarily, is a bet that the DRAM opportunity is large enough to justify the strategic exposure. Chairman Chey’s projection of supply constraints lasting through 2030 suggests the company thinks it has years, not quarters, to play this hand.

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