SK hynix 3Q25 Earnings Call – Key Q&A (1)

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1. Details on the completion of 2026 HBM supply negotiations
• This year, numerous external variables made it difficult to finalize not only supply volumes but also product mix. As customer performance requirements evolved, it took longer than initially expected.

However, discussions with customers have now been concluded, and supply contracts for next year’s HBM have been finalized. Since 2023, demand for AI infrastructure and the company’s strong product competitiveness have kept HBM fully sold out. Prices are currently set at a level that allows profitability to be maintained.

Given the rapid expansion of HBM demand driven by the AI market, it will be difficult for supply to catch up with demand in the near term. Growth is expected to outpace general DRAM. Even in 2027, supply is projected to remain tight relative to demand. The company will ensure timely delivery of products tailored to customer needs.

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2. On customer requests for higher HBM4 specifications
• As the AI inference market expands, memory bandwidth has become increasingly important. Since the number of I/O channels in HBM4 has been set to double that of the previous generation, customer requirements have shifted toward higher-speed performance.

With the industry’s leading HBM technology, the company is meeting these enhanced specifications. It was among the fastest in the industry to deliver samples reflecting customers’ upgraded requirements and is now prepared for mass production.

As competition intensifies among AI chipmakers, memory performance has become the key bottleneck in technological progress. Performance requirements for next-generation memory, including HBM, will continue to rise. SK hynix plans to deliver next-generation HBM products in a timely manner that meet customer expectations. SK hynix 3Q25 Earnings Call – Key Q&A (2)

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3. Achieving over KRW 10 trillion in quarterly results—how is this memory cycle different from past booms?

• Contrary to earlier expectations, memory demand has surged this year, pushing the market into a super-boom. We believe the current cycle differs from the 2017/2018 cycle.

The key difference is that today’s demand is tied to a paradigm shift toward AI and is connecting to a wide range of applications. AI is creating demand by being layered onto existing use cases, and over the medium to long term it is driving fundamental change by cultivating new applications such as autonomous driving and robotics.

Notably, as AI computing expands into inference, it is also stimulating demand for general servers. We expect server system shipments next year to grow in the high-teens percent. Server-bound demand will continue to lead overall DRAM demand.

On the supply side, even as HBM production expands and more cleanroom space is secured, total output growth is inherently limited. These characteristics structurally constrain DRAM industry supply growth, which underpins our view that the super-cycle will be prolonged.

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4. Basis for seeing structural strength in eSSD demand

• Background to rising NAND demand: With server customers ramping AI investments, build-outs for both AI servers and general servers are increasing. Demand for TLC products is rising. As AI-generated data such as images and videos surges, storage needs are climbing, creating HDD supply shortages. Hyperscalers are increasingly shifting to high-capacity QLC eSSDs. We view today’s demand changes as going beyond short-term supply-demand issues and driving a structural uptrend in eSSD demand.

To overcome the limits of the traditional LLM approach, the importance of RAG (Retrieval-Augmented Generation) is growing. Instead of relying solely on trained data, RAG retrieves documents related to a query from external data before generating the final answer, enabling higher accuracy by incorporating the latest and user-specific data. Implementing RAG requires building external database vector stores, and eSSDs are essential for fast retrieval. We therefore expect storage demand to rise on the back of high-performance TLC and high-capacity QLC eSSDs.

In addition, as data throughput needs during inference surge, there is a growing need to offload data previously handled on the GPU to memory/storage for more efficient AI operations. By offloading the GPU’s KV cache down to SSDs, it’s possible to improve throughput per watt and reduce user response latency. We thus expect storage demand to increase, centered on high-performance TLC and high-capacity QLC eSSDs. As AI use cases proliferate, eSSD demand is rising, and memory demand is broadening from DRAM into NAND.

Citi: The Semiconductor Cycle Still Has Significant Upside Potential 🧵/1

Citi analyst Christopher Danely expects global semiconductor sales to rise 16% in 2025 to reach an all-time high of $731 billion. However, he emphasized that this revenue growth is entirely driven by pricing, while shipment volumes remain well below previous peaks.
This indicates that inventory levels are low and the industry still has substantial room for further growth. According to Citi’s data, the current semiconductor industry’s revenue growth has been primarily driven by the surge in logic chip prices.

Citi noted that the average selling price (ASP) of logic computing chips (including AI accelerators) has risen 24% over the past three years, far exceeding the 2% growth rate of the previous decade. The share of logic computing chips in total semiconductor sales has also climbed from 27% in 2020 to 39% in 2025. 🧵/2

A Semiconductor Genius Who Rejected America’s Courtship, Produces “Terrifying Disciples” in China
– Korea JoongAng Ilbo 『China Innovation Report』 🧵/1

Sun Nan (孫楠), a professor at the University of Texas at Austin. Nicknamed a “semiconductor genius,” he is one of the top talents in the field. After graduating from Tsinghua University in China, he went to the U.S. to study abroad and earned his Ph.D. at Harvard. In 2020, at the age of 34, Professor Sun faced two choices.

“Should I stay in the U.S., or return to China….”

If he chose the latter, the opportunity cost was immense. At that time, his position at the University of Texas came with an average annual salary of $150,000 (about 200 million won). Appointed at just 26 years old, he also enjoyed the security of tenure. Boarding a plane to Beijing meant giving all that up.

The other option was his alma mater, Tsinghua University. The salary there would be about 1 million yuan (around 192.76 million won). Including elite talent funds, it would easily surpass what he earned in the U.S. Since his alma mater was earnestly reaching out to him, his heart began to sway. The school even promised to build him a research team.

What did he choose? America or China. Like a scene from The Matrix, after much deliberation, the “red pill” Sun Nan swallowed was becoming a haigui (海龜 – a term for overseas-educated returnees). In 2020, Sun rejected America’s temptations and returned to China.

He was a genius worth drooling over. From 2002 to 2006, he studied at Tsinghua University, then chose to go to the U.S. to master cutting-edge semiconductor technology. Just four years of research later, he earned his Ph.D. in integrated circuit chip design from Harvard. He went on to secure tenure at the University of Texas. Between 2014 and 2024, he was the most prolific author in the world’s top semiconductor design journal, JSSC. From 2013 to 2020, he also consulted for companies such as AMD and TI, maintaining close ties with industry. To say he never considered staying in America would be a lie.

If you look at Professor Sun’s interview published in Tsinghua University’s campus newspaper, you can read what he was thinking at the time of his return.

“I went to the United States to learn advanced semiconductor technology. I achieved a lot there, but I believed that as far as my abilities reached, it was only right to contribute to China. That is what a Tsinghua graduate should do.” 🧵/2

Morgan Stanley: According to channel checks, the contract negotiations between SK Hynix and NVIDIA for HBM3E 12-hi remain in the price range of around $440 per die ($1.69 per Gb). However, the negotiations are still ongoing and have not yet been finalized. Morgan Stanley: According to channel checks, HBM4 has been priced at $590–600 per die ($2.30–2.34 per Gb), but it is deemed unlikely that this pricing will be part of a full-year fixed contract.

🧵1/ The HBM That Jensen Huang Called a Miracle Made with Samsung: What Happened Over the Past 9 Years? Hackerook JoongAng Daily

“The High-Bandwidth Memory (HBM)? It’s just a cheap knockoff of the Hybrid Memory Cube (HMC) we’re developing. I won’t bother debating HBM—arguing over it is like taking candy from a child.”

In August 2016, at the International Symposium on Low Power Electronics and Design (Hot Chips) held in Cupertino, California, a senior engineer from Micron harshly criticized HBM, which had been on the market for just one year, and then triumphantly left the stage saying, “The HMC that’s coming out soon is going to be spectacular.”

Shortly thereafter, Samsung Electronics announced plans to release a low-cost version of HBM that would reduce both performance and price. At that time, Samsung had already dominated the latest HBM2 market.

SK Hynix was the last to present. At that time, both performance and sales of SK Hynix’s HBM2 were a complete flop. Nevertheless, the presenter timidly struck back at Micron by unveiling plans for HBM3, saying, “A smaller kid can sometimes beat a bigger kid and snatch their candy.”

It’s hard to believe that HBM was once so ridiculed and doubted—now, in the era of artificial intelligence (AI), HBM is hailed as the “prince of memory.” Yet, only nine years ago, the three major memory companies—Samsung Electronics, SK Hynix, and Micron—viewed HBM in exactly this way. Their judgments then have determined today’s market landscape. 2/ Market Shares of HBM: 55 : 40 : 5. Those are the market shares of SK Hynix, Samsung Electronics, and Micron respectively (source: J.P. Morgan, 2024).

Since the 2000s, the semiconductor industry has been focused on developing next-generation memory to overcome the “memory wall.” The “memory wall” refers to a bottleneck phenomenon arising from the performance gap between the central processing unit (CPU) and memory. Even if the CPU swiftly completes its computations, it often has to wait idly for the next piece of data to arrive from memory. How much memory speed can be improved directly determines the speed of the entire system.

HBM was born as a “memory unlike any other in the world” in this context. The “18 years of HBM development” showcase the very nature of the advanced semiconductor industry—its competition and cooperation, chasing and overtaking drama.

🧵How China Took Over the LiDAR Industry: The Comeback of a "Fool's Tech"

While Elon Musk’s Tesla rejected LiDAR, China quietly took over the industry.
This thread unpacks how it all started—and where it stands now. 👇 The Eyes of Autonomy

LiDAR (Light Detection and Ranging) is a sensor that emits 360-degree laser beams to detect its surroundings quickly and accurately in 3D. Since the speed of light is constant (299,792,458 m/s), it calculates distance based on how long it takes the laser to bounce off objects and return.

Today, LiDAR is a key component in premium robotic vacuum cleaners and even in Apple iPhones—its scanner enables sharper night portraits. But LiDAR plays its most essential role in autonomous driving. Whether it's pitch dark, raining, snowing, or foggy, LiDAR helps vehicles detect the size and position of objects, making self-driving possible.

In 2023, about 1.6 million LiDAR sensors were installed in vehicles worldwide, ranging from fully autonomous robotaxis like Google Waymo to modern vehicles with advanced driver-assistance systems. For instance, the BMW i7 uses Israel-based Innoviz's LiDAR, and Volvo’s EX90 uses U.S.-based Luminar's.

LiDAR was first developed in the 1960s for military use in the U.S. But it wasn’t until the past decade—when sensing range exceeded 200 meters and devices shrank in size—that vehicle-grade LiDAR entered mass production. Automakers rushed to partner with LiDAR firms in hopes of achieving Level 3 autonomy (hands-free driving) by 2021 or 2022.

These days, it's no exaggeration to say that Samsung's stock price practically hinges on NVIDIA.

But did you know that back in the 2000s, there was a time when NVIDIA was desperately clinging to Samsung?

This thread covers it in detail.🧵 Jensen Huang founded NVIDIA in 1993. At the time, Samsung Electronics was the rising sun, holding the No.1 position in the global DRAM (memory semiconductor) market. Comparing the two companies back then would have been absurd.

Dissecting Foxconn: "Let's Build an AI Factory" — A Secret Meeting with Jensen Huang... Foxconn's Affair Beyond Apple (JoongAng Ilbo, Korea)

In October 2023, at the Hon Hai Tech Day held in Taipei, Taiwan, Jensen Huang, CEO of Nvidia, took the stage wearing his signature leather jacket and showed a sketch. On one side of the crude pen drawing were cars, and on the other side, a factory. Although it looked like it had been hastily scribbled in a notebook, the picture embodied the future envisioned by Hon Hai Precision Industry's subsidiary, Foxconn, widely known as the "iPhone subcontractor."
Introducing the sketch, CEO Huang explained, "This represents the AI factory that Nvidia and Foxconn will build together."
The system illustrated how data collected from autonomous electric vehicles would be transmitted to the AI factory, where the software would be improved and then wirelessly updated across all released vehicles. Standing next to him, Foxconn CEO Young Liu added, "Foxconn will now evolve from a manufacturing company into a platform solutions company."

Fast forward a year and a half to April 2025: Foxconn’s factories in China have taken a direct hit from U.S. President Donald Trump's tariff war. Once an indispensable cog for Apple, thanks to China's abundant and inexpensive labor, Foxconn’s Chinese plants have now become a liability.
Is this the end for Foxconn, the company that completed Apple's empire? It seems Hon Hai Group founder Terry Gou had long anticipated this day, preparing multiple cards to reduce dependency on Apple. 1. Foxconn, the Last Puzzle Piece for Apple

Terry Gou, a young Taiwanese man who had worked at a rubber factory, founded Hon Hai Precision Industry (then called Hon Hai Plastics) in 1974. Starting with just 10 employees, the company supplied plastic parts for televisions. Foxconn would later become Hon Hai’s core subsidiary.
After establishing its roots in Taiwan, Gou turned his attention to China in the company’s 14th year and built a factory in Shenzhen, Guangdong Province.
Thanks to China's reform and opening-up policies at the time, Foxconn received full support from the government, a "cheat code" that would later fuel its explosive growth.
According to Professor Henry Wai-chung Yeung of the National University of Singapore in his book Strategic Coupling, in 1995, Terry Gou brought Michael Dell, founder of Dell Technologies, to Foxconn's Shenzhen factory to introduce the company’s production system.
At that time, PC companies like Dell typically purchased parts from suppliers and assembled them in their own factories. Eager to break from this model, Dell was impressed after touring Foxconn's factory and signed an Electronics Manufacturing Services (EMS) contract.
This became the first turning point that changed Foxconn’s fate. Starting with Dell, Foxconn became known as the "invisible helper," manufacturing products without its own branding.

▶ The Speed That Captivated Apple:
"Designed by Apple in California, Assembled by the World."
Foxconn was the final piece that completed Apple’s ecosystem, which lacked its own factories.
With massive labor forces working 24/7 in three shifts, Foxconn has virtually monopolized iPhone production since the device’s launch in 2007.
The New York Times (NYT) article from 2012 highlighted the astonishing strength that captivated Apple.

Just a few weeks before the iPhone’s scheduled release, a last-minute need to reassemble screens arose. Around midnight, the factory supervisor mobilized 8,000 workers from the dormitories, launching a 12-hour shift system immediately.
The workers were provided only biscuits and a cup of tea.
Within 96 hours, the factory was producing over 10,000 iPhones per day.
An Apple executive said, "The speed and flexibility were breathtaking."

In 2010, Foxconn’s harsh labor conditions became a global controversy.
Workers operated in an environment where even speaking during work hours was forbidden, and it was revealed that around 10 workers had attempted suicide in a single year.
Yet, it was also acknowledged that Foxconn demonstrated a competitiveness that few other companies could match.
The NYT reported, "For Apple executives, Foxconn was proof that China could provide labor forces faster and more diligently than the U.S. No American factory could hire 3,000 workers to live in dormitories overnight."

30 Years After Jiang Zemin’s Visit to Ulsan: How China Swallowed the Shipbuilding Industry- Joongang ilbo

One early winter day in November 1995, a 71‑year‑old senior Chinese official visited the Hyundai Heavy Industries shipyard in Ulsan. His eyes were drawn to Dock No. 3—a million‑ton berth spanning the equivalent area of six football fields. Awaiting his inspection were six vessels: two 1,500‑TEU container ships, two 4,200‑TEU container ships, a bulk carrier, and an oil tanker, all ordered by Australian and Danish shipping lines. As he examined each ship in detail, he repeatedly voiced his admiration.

“Feichang bang! (非常棒 – Excellent!)”

His name was Jiang Zemin (江澤民, 1926–2022), China’s fifth president and the heir to Deng Xiaoping’s reform and opening‑up legacy, who would go on to lay the cornerstone of modern China. A trained engineer and alumnus of Shanghai Jiao Tong University’s Department of Electrical and Mechanical Engineering, he spent thirty minutes at the Ulsan yard, firing off numerous questions. Chinese aides busily jotted down every answer provided by Hyundai Heavy Industries on the spot. President Jiang visited South Korea from November 13 to 17 on a four‑night, five‑day trip. After holding summit talks with President Kim Young‑sam, he toured Samsung Electronics’ Giheung semiconductor plant, Hyundai Motor’s Ulsan assembly plant, and Hyundai Heavy Industries’ Ulsan shipyard. It was the first visit by China’s paramount leader, and he made an unusual request: “I must see the shipyard.” Nonetheless, we couldn’t grant unrestricted access—once the Chinese see a facility, they replicate it quickly—so we instructed our companies: “Offer the warmest welcome, but do not show any critical production areas.”

According to Han Ih‑heon, then the Blue House’s Economic Secretary, upon returning to China President Jiang issued a directive to “swiftly learn the Korean development model.” He must have drawn immense motivation from Korea’s dramatic transformation since the war over forty years earlier.

The Asahi Shimbun’s Beijing dispatch described the situation as follows:

“Chairman Jiang was particularly interested in Korea’s economic system, where private enterprise operates under government guidance and chaebol conglomerates play a central role. China’s Foreign Ministry and Ministry of Commerce have been consulting with their Korean counterparts on the economic development plans Korea has pursued since the 1960s.”

Yet the China that once eagerly sought to emulate Korea has vanished. Last year, it became the world’s leading shipbuilder by order volume and transformed into a naval power with three aircraft carriers. How did China catch up to Korea, and what has happened in Korea’s shipyards in the intervening years?