The ongoing shortage of DDR5 and other general-purpose memory could begin to ease as SK Hynix reportedly shifts its production strategy back toward conventional DRAM.
After securing record revenue from AI-focused High Bandwidth Memory (HBM), the company is now said to be slowing its HBM expansion and increasing its focus on general-purpose RAM.
HBM has been the biggest source of growth for the world’s leading memory manufacturers, including SK Hynix, Samsung, and Micron, as demand for AI hardware surged. The strong demand pushed all three companies to prioritize HBM production, reducing their focus on general-purpose DRAM such as DDR5 and contributing to supply shortages.
According to a report by Chosun Biz, HBM now accounts for around 40% of SK Hynix’s total revenue. The company has reportedly decided to adjust the expansion of its sixth-generation HBM4 production, despite HBM4 being a key memory technology for AI chips. SK Hynix remains the primary supplier of memory for NVIDIA’s upcoming Rubin platform.
Instead of expanding HBM production more aggressively, the company is reportedly redirecting resources toward the general-purpose DRAM market, where supply shortages have become severe, and profit opportunities have increased.
Industry sources say SK Hynix is delaying the planned conversion of some HBM3E production lines to HBM4. The company reportedly believes there is no immediate need to accelerate the transition to HBM4 and the future HBM4E generation because it is already well positioned to meet expected demand for NVIDIA’s Rubin platform.
The report also says SK Hynix wants to strengthen its position in the general-purpose DRAM market, where competitor Samsung has been generating strong profits. As a result, memory manufacturers are expected to gradually shift more production toward products such as DDR5 and LPDDR5X.
According to industry sources, the operating profit margins for general-purpose DRAM are currently higher than those for HBM. The decision to delay some HBM4 expansion is reportedly based on the company’s strong position in the HBM market, allowing it to pursue additional profits from conventional DRAM without weakening its leadership in AI memory.
The general-purpose DRAM market has been facing severe shortages after manufacturers redirected production capacity toward HBM and AI-focused memory. While SK Hynix’s reported strategy change is not expected to significantly reduce DDR5 prices, it could improve memory availability in the OEM, ODM, and server markets.
SK Hynix previously reported that the average selling price (ASP) of its DRAM products had increased by more than 60%. The company’s recent DDR5 supply agreement with Microsoft also reflects its continued interest in the general-purpose DRAM market.
Even with increased investment in DDR5 and other conventional memory products, SK Hynix is expected to maintain a strong position in the HBM market. Industry estimates suggest that profit margins for general-purpose DRAM could double by the end of the year.
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