Micron: 12-layer HBM3E begins mass production ahead of schedule

Boosted by AI demand, SK Hynix takes the lead in mass producing 12-layer HBM3E.

On Thursday, September 26th, SK Hynix announced that the company has started mass producing 12H (12-layer stack) HBM3E chips, achieving the largest 36GB capacity in existing HBM products; the company will provide this product to customers within the year.

Following the announcement, SK Hynix's stock price continued to rise, surging over 8% at the time of writing.

HBM3E 12H becomes the main battlefield for suppliers in the second half of the year

HBM (High Bandwidth Memory) is a key component of GPUs, helping to process large amounts of data generated by complex applications. Chip vertical stacking technology can save space and reduce power consumption.

Currently, there are only three major manufacturers of HBM—SK Hynix, Micron Technology, and Samsung Electronics. Among them, Samsung Electronics first introduced HBM3E 12H in February this year.

Considering NVIDIA's decision to incorporate HBM3E 12H into Blackwell Ultra and the lightweight model B200A, this product has become a key battlefield in the AI semiconductor field in the second half of the year.

Some believe that the second half of this year is crucial for determining the future landscape of the HBM market. Whether SK Hynix can maintain its leading position or Samsung Electronics can reverse its decline will depend on who first provides HBM3E 12H to NVIDIA.

A industry insider commented:

"Even though the price of HBM3E 12H may slightly decrease due to intensified competition, the second half of the year is clearly the time to determine the landscape of the HBM market."

"The key is how much each company's yield rate can be improved."

Media reports revealed that SK Hynix has been a major supplier of NVIDIA's HBM chips and provided HBM3E to an unnamed customer at the end of March.

Despite strong demand, Morgan Stanley warns of oversupply risks

According to reports, SK Hynix's HBM3E 12H stacks 12 layers of 3GB DRAM chips, with the same thickness as the previous 8-layer product but a 50% increase in capacity. To achieve this goal, the company made each DRAM chip 40% thinner than before and used Through Silicon Via (TSV) technology for vertical stacking.

The announcement also stated that the memory operation speed of HBM3E 12H has been increased to 9.6Gbps, which is currently the highest memory speed available in the industry. Running the Llama 3 70B large language model on a GPU with four HBM3E chips can achieve the ability to read 35 times 70 billion overall parameters per secondAccording to previous estimates by the media, compared to 8-layer stacking, HBM3E 12H has an average 34% increase in AI training speed, and the number of inference service users can also increase by more than 11.5 times.

In addition, the company will use its core technology advanced MR-MUF process to improve the heat dissipation performance of HBM3E 12H by 10% compared to the previous generation, and enhance the control of warping issues to ensure stability and reliability.

The company stated that the early mass production of 12-layer HBM3E is to meet the growing demand of AI enterprises. Justin Kim, President and Head of AI Infrastructure at SK Hynix, said:

"SK Hynix has once again broken through technological limitations, demonstrating our industry-leading position in the AI memory field."

"We will continue to maintain our position as the world's largest artificial intelligence memory supplier, steadily preparing for the next generation of memory products to overcome the challenges of the AI era."

However, earlier, Morgan Stanley issued a research report warning of an "impending memory winter", with potential oversupply of HBM and serious supply-demand imbalance in DRAM, among others.

Morgan Stanley predicts that by 2025, the "good" supply in the current HBM supply chain (meaning high-quality and sufficient products) may gradually catch up with or even exceed the currently overestimated demand.

Based on this, Morgan Stanley has issued a "double downgrade" on SK Hynix, lowering its rating to "underweight" while "halving" its target price from 260,000 Korean won directly to 120,000 Korean won, leading to a one-day stock price plunge of 11%