HBM4 Decides the Battle: UBS Predicts Samsung Will Surpass SK Hynix in Market Share Next Year

According to the latest forecast from UBS, Samsung Electronics will surpass SK Hynix (SKHY-US) next year to become the leader in the high-bandwidth memory (HBM) market. Samsung's market position has been further strengthened as its largest industry customer, NVIDIA (NVDA-US), increases adoption of Samsung’s sixth-generation HBM (HBM4), while emerging key customer AMD (AMD-US) has designated Samsung as a primary supplier and plans to integrate Samsung’s HBM4 into its Helios AI platform.

In a report released on July 30, UBS predicts that starting with the HBM4 generation, Samsung Electronics will officially match and then exceed SK Hynix in HBM bit shipments.

UBS analyst Nicolas Gaudois forecasts in the report that Samsung’s HBM bit shipment market share will reach 41% next year, propelling it to first place globally. SK Hynix, which held a 48% share this year and ranked first, will drop to 39% next year, falling to second place. Micron (MU-US) is expected to maintain third place with a 20% market share.

Notably, UBS had previously predicted in a May report that Samsung would not catch up to SK Hynix until 2027. However, the latest report has now moved that market reversal forward to before 2027.

An industry insider familiar with Samsung’s business stated, "Samsung is making the fastest progress in HBM4 certification and yield improvement."

He added, "Considering the certification speed of hyperscale cloud operators and the continuous increase in supply volume, actual market developments are likely to closely align with UBS’s predictions."

In reality, although NVIDIA was relatively cautious about procuring Samsung’s HBM3E in the past, it now shows strong intent to adopt HBM4.

Meanwhile, AMD has already listed Samsung as a main supplier and plans to prioritize Samsung’s HBM4 in its next-generation AI platform, Helios.

This indicates that SK Hynix’s market-leading advantage, built thus far, is facing increasing challenges with the arrival of the HBM4 era.

To respond to competition, SK Hynix is continuously expanding its capital expenditure.

UBS noted that during its Q2 earnings call, SK Hynix management raised its annual capex guidance to over 40 trillion Korean won, the high end of its range.

However, analysts point out that if SK Hynix continues to rely solely on existing production bases such as Icheon in Gyeonggi Province and Cheongju in North Chungcheong Province, its production expansion speed may still lag behind Samsung. In contrast, Samsung has reserved large tracts of undeveloped land in Pyeongtaek, offering greater room for capacity expansion.

Additionally, SK Hynix stated that its long-term agreement (LTA) renewal progress is better than expected.

To date, the company has signed a total of 10 LTAs, including supply contracts with major U.S. hyperscalers and OEMs (original equipment manufacturers).

UBS believes that while LTAs may limit short-term price increases, they will help enhance profitability and shareholder returns in the long run.

UBS also notes signs that SK Hynix is falling behind Samsung in transitioning to HBM4, which is reflected in its operational performance.

According to UBS statistics, SK Hynix’s Q2 DRAM average selling price (ASP) increased only 30% quarter-on-quarter, primarily because HBM4 only began mass shipments late in the quarter.

In contrast, Samsung prioritized boosting HBM4 production capacity and expanded shipments to NVIDIA and AMD, allowing it to benefit earlier from the high pricing of HBM4.

SK Hynix, on the other hand, due to its slower transition to HBM4, has also fallen behind in enjoying the benefits of higher ASPs.