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Nvidia supplier SK Hynix starts mass manufacture of next generation memory chip

The emblem of SK Hynix is displayed at company headquarters in Seongnam, South Korea, April 25, 2016

SEOUL, March 19 (mod1s) - SK Hynix Inc (000660.KS), opens new tab said on Tuesday it has commenced mass manufacturing of next-generation high-bandwidth memory (HBM) chips used in artificial intelligence chipsets, with sources predicting first shipments would go to Nvidia (NVDA.O), opens new tab this month.

The new kind of chip - termed the HBM3E - is a focal point of heated rivalry. Last month, Micron Technology (MU.O), opens new tab stated it had begun mass manufacturing of the chips while Samsung Electronics (005930.KS), opens new tab said it had built the industry's first 12-stack HBM3E chips.

SK Hynix has, however, dominated the HBM chip industry by virtue of being the exclusive provider of the version now utilized - the HBM3 - to Nvidia who has 80% of the market for AI processors. 

"The company expects successful mass production of HBM3E and with our experience... as the industry's first provider of HBM3, we expect to cement our leadership in the AI memory space," SK Hynix said in a statement. 

The new HBM3E chip from the world's second-largest memory chipmaker promises 10% increase in heat dissipation and handles up to 1.18 terabytes of data per second.

SK Hynix's HBM capacity is completely booked until 2024, experts say, as growing demand for AI chipsets pushes up demand for high-end memory chips used in them. 

"SK Hynix has secured an absolute market position... and its volume increase in high-end memory chips is also expected to be the most aggressive among chipmakers," said Kim Un-ho, analyst at IBK Investment & Securities. 

Nvidia (NVDA.O), opens new tab announced on Monday its next flagship AI processor, the B200, touted to be 30 times quicker at certain tasks than its predecessor as it strives to preserve its leading position in the artificial-intelligence market. 

Shares in SK Hynix have quadrupled in value over the previous 12 months on its leadership position in HBM chips.


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