Driving key technologies, intertwined with industries across the world, and an essential part of the AI era—semiconductors are integral to daily life. This fifth episode in the Semiconductor 101 series explores in detail why semiconductors are crucial for shaping modern society. The article also delves into why SK hynix is adapting its approach in the AI era and examines the sweeping influence of the semiconductor industry on the global economy.

Why does the world need semiconductor memory?

Semiconductor memory is indispensable for modern technology, enabling efficient data storage and processing across a variety of devices. To gain a better understanding of semiconductor memory’s importance, let’s picture how its absence would impact some areas of life.

A world without semiconductor memory would be like stepping back in time

Work

Without semiconductor memory, workers would find tasks that once could be finished in a day would take weeks or even months to complete. Computers would be painfully slow and inefficient —making opening and saving files a chore—and offer significantly reduced storage capacity. Multitasking would also be inefficient, with noticeable delays when switching between applications like Word documents and web browsers.

Other essential business applications such as video conferencing, cloud-based software, and messaging tools would be unreliable and costly, hindering collaboration and presenting huge obstacles to remote workers.

Digital Entertainment

People may struggle to fill their evenings and weekends as the entertainment on offer becomes severely limited. Online activities would be time-consuming or almost impossible without semiconductor memory, which enables networking equipment to manage and route data. Social media would be unrecognizable, as users would be unable to instantly share photos and videos. Streaming, gaming, and cloud services would also be unusable without fast and scalable storage solutions. Smartphones would not exist in their current form either, as high-performance and efficient memory is key to the functionality, compact size, and battery life of modern phones.

Banking & Finance

Financial transactions would look very different in a world without semiconductor memory. It would be necessary to make frequent trips to the bank, as app-based transactions would be impossible. This would affect personal finances and the broader economy.

Why is semiconductor memory crucial for the AI era?

In the AI era, semiconductor memory plays a key role in ensuring the smooth operation of AI applications. Today’s AI systems are performing advanced tasks such as image generation and problem solving which require significant data processing capabilities. Moreover, as these AI tools require ever-growing amounts of data to continue their evolution, there is a pressing need to manage this explosion of data. That’s where semiconductor memory comes in.

Semiconductor memory offers several key features which support the smooth operation of AI

High-performance memory is essential for data storage, retrieval, and processing, enabling technologies to keep pace with the rapid rate of data generation. Let’s break down some of the reasons why semiconductor memory is essential in the age of AI.

• Rapid Data Processing: AI systems must rapidly process vast amounts of data to make real-time decisions. Semiconductor memory supports this process by enabling fast data access and storage.
• AI Training Support: AI applications are trained on large datasets to improve their performance. Memory products with high capacity and bandwidth can store and manage these datasets. Moreover, the rapid read/write capabilities of memory solutions can accelerate AI training, making AI systems more efficient.
• Energy Efficiency: AI applications are resource intensive. Semiconductor memory helps reduce power consumption, making them more sustainable. Edge devices¹, such as smart sensors and mobile AI processors, depend on energy-efficient semiconductor memory to perform tasks like real-time image recognition while conserving battery life.

As AI continues to evolve and integrate into various technologies, semiconductor memory remains the key to unlocking its full potential.

Why is HBM an essential product for AI?

Featuring stacked DRAM² chips, High Bandwidth Memory (HBM) is an ultra-fast memory technology which has become crucial in the age of AI. Combining high performance with low-power consumption, HBM can efficiently handle the growing demands of AI systems.

Combining high performance with low-power consumption, HBM is an essential AI memory product

To illustrate some of the benefits of HBM for AI compared to other DRAM products, think of it as an upgraded metro system that reduces passenger wait times at stops. Traditional DRAM chips have a limited number of data paths, akin to station entrances and exits, which are prone to bottlenecks in the data-centric AI era.

Meanwhile, HBM features significantly more data paths which run vertically to support the smooth and rapid passage of data, just like passengers freely passing through a station with numerous entrances and exits. HBM’s ability to minimize delays, or latency, is key in AI systems which need real-time data access to perform tasks such as deep learning.

As touched upon in the previous question, AI systems handle massive datasets and complex computations. HBM supports these tasks by enabling swift and efficient data processing, making it ideal for AI training. For example, SK hynix’s world’s best-performing 12-layer HBM3E offers industry-leading data processing speeds of 1.18 terabytes (TB) per second.

In addition, HBM is optimized for supporting parallel processing in AI systems due to its high bandwidth. As it offers high performance with low-power consumption, HBM also enables AI systems to operate efficiently, particularly in data centers and edge computing devices.

Why does SK hynix need to expand its semiconductor production capacity?

Today, phones instantly recognize faces, autonomous cars cruise down highways, and smart fridges can place orders for food. These developments are largely thanks to technologies such as AI, 5G, and Internet of Things (IoT) devices, which all require high-performance memory products. Moreover, the rapid growth of these and other advanced technologies is further heightening memory demand.

The number of AI users is forecast to grow rapidly, heightening demand for semiconductor memory

Looking at the AI market alone, the number of AI users is projected to grow from almost 255 million in 2023 to around 730 million by 2030³. In response to this changing technological landscape and resultant rising demand for memory, SK hynix is ramping up its production capacity. The company currently operates four production facilities in its home country of South Korea and plans to build two additional domestic facilities in the future, namely:

• The Yongin semiconductor cluster which will boost the company’s production of AI memory
• A fabrication facility (fab) in Cheongju which will produce next-generation DRAM products, including HBM

While it may seem straightforward to simply build new manufacturing facilities to increase production, there are other aspects to consider. For example, there are often challenges associated with commercializing innovations through mass production.

SK hynix is adept in this area, as the company has a long history of transitioning innovations from the R&D stage through to high-volume manufacturing, particularly with DRAM and NAND flash⁴. A recent example of this occurred in March 2024, when the company successfully mass-produced its 8-layer HBM3E through close client collaboration and enhancements in product design.

Why does the semiconductor industry have so much impact on the global economy?

The value of the semiconductor market is greater than the GDP of numerous countries

Semiconductors are essential components in a multitude of electronic devices and are driving technological advancements, making the industry a cornerstone of the global economy. In 2023, the semiconductor market was valued at around 611 billion USD, greater than the GDP of Singapore. However, the full extent of the semiconductor sector’s impact on the global economy can only be understood when looking at some of the industries fueled by these chips.

The consumer electronics market, which is valued at around 950 billion USD, relies heavily on semiconductors. The market’s size is emphasized by the fact that global smartphone subscriptions have surpassed 6.9 billion.

The telecommunications sector, including the expected trillion-dollar 5G market, also depends on semiconductors along with the automotive and healthcare industries. As previously mentioned, semiconductors are also key to advanced technologies such as AI, 5G, and IoT, highlighting their ubiquity in a wide range of high-value technology markets.

While it has been established that the semiconductor sector is a multi-billion-dollar industry which creates immense direct revenue, it also contributes to the economy in other forms. In particular, the sector employs people across the world in roles such as R&D, supply chain management, and manufacturing. By 2030, an estimated 3 million employees will be needed in the sector, highlighting its impact on jobs markets worldwide.

Exploring semiconductor manufacturing in more detail, production is concentrated in East Asian countries such as Taiwan and South Korea. Slowdowns in production which contributed to global chip shortages throughout the years have further highlighted the sector’s strategic importance to numerous industries across the world.

Looking ahead, the semiconductor industry’s impact on the global economy will only continue to grow as the sector itself, and others which rely on chips, expand in the future.

¹Edge: The boundary of a network where data is generated and processed locally on devices or sensors, rather than being transmitted to a centralized data center.
²Dynamic Random-Access Memory (DRAM): A type of short-term computer memory that stores data temporarily while a device is on, losing information when the power is turned off.
³Statista, “Generative artificial intelligence (AI)” report (2024)
⁴NAND Flash: A long-term storage technology that retains data even when the power is off, commonly used in USB drives and memory cards.

The final episode of the Semiconductor 101 series will explore “how” semiconductors are made and provide insights on launching and advancing a career in this dynamic industry.

<Other articles from this series>

[Semiconductor 101] SK hynix’s Guide to Who’s Who in the Semiconductor Industry

[Semiconductor 101] SK hynix Explains “What’s What” in the Semiconductor World

[Semiconductor 101] When Semiconductors & SK hynix Made Their Mark on the World

[Semiconductor 101] “Where” in the World Are Semiconductors Made and Applied? SK hynix Reveals All

The post [Semiconductor 101] “Why” Modern Tech Needs Semiconductors & SK hynix’s Key Contributions first appeared on SK hynix Newsroom.

The post [Brand Video] Unlocking Endless Possibilities in the AI Era first appeared on SK hynix Newsroom.

It started with bytes, kilobytes, and megabytes. Then gigabytes and terabytes. Now, it’s zettabytes (1 billion terabytes), yottabytes (1,000 zettabytes), and more. The rapid rate of data generation in recent years means new terms need to be created to quantify data.

These days, more than 300 quadrillion (300,000,000,000,000,000) bytes of data are created globally every day¹. Emails, online video, social media, web searches, Internet of Things (IoT) devices and more all contribute to today’s data explosion. With the arrival of the AI era and emergence of applications such as ChatGPT, Sora, and Midjourney, the pace of data generation will only continue to grow. So, how can the world handle and manage all this data? The answer lies in high-performance semiconductor memory.

¹Source: “Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2020, with forecasts from 2021 to 2025,” Statista (June 2021). The 2023 figure is a forecast and has been converted into a daily total.

As highlighted in the brand film above, memory is required to store, process, compute, and learn the world’s data. Today, SK hynix is the leading memory solution provider, offering the world’s fastest and most advanced products that are critical for AI systems.

How Memory Unlocks Advanced AI Performance

In the age of AI, semiconductor memory is essential for the smooth operation of AI systems. This is shown in memory’s role in large language models (LLMs)², which are trained on large datasets to improve their performance. Memory products enable the storage and quick retrieval of these datasets, allowing AI systems to efficiently process data. Furthermore, memory solutions with high bandwidth and capacity accelerate the training process of these systems by rapidly accessing and handling data. Trained AI models need to then make predictions, process new data, or generate an output in real-time applications. This is where memory solutions enable rapid access to pre-trained models and associated data, allowing for quick inference³ and response times.

²Large language model (LLM): As language models trained on vast amounts of data, LLMs are essential for performing generative AI tasks as they create, summarize, and translate texts.
³AI inference: The process of running live data through a trained AI model to make a prediction or solve a task.

As a market leader, SK hynix offers high-performance AI memory products that are crucial for AI training, inference, and more. All of these solutions are optimized to meet the growing needs of AI systems.

SK hynix’s Next-Gen Memory for Tomorrow’s AI Systems

The increasing complexity and growing inference needs of AI applications have led to the emergence of more sophisticated models, larger datasets, and higher data processing requirements. To satisfy these high demands, SK hynix has been developing total AI memory solutions capable of enhancing AI performance through rapid data transfers, increased bandwidth, and maximum energy efficiency.

These products include the company’s next-generation AI server solutions, such as the world’s best-performing HBM3E. This ultra-high performance AI memory solution offers industry-leading data processing speeds and high capacity—making it ideal for AI training servers in data centers. Having already gained the biggest share of the HBM⁴ market, SK hynix will further its leadership in the field through the mass production of HBM3E.

Another key AI server product from SK hynix is CXL^®5, a standardized interface that elevates the utilization of CPUs, GPUs, accelerators, and memory. As it can expand memory as well as increase system bandwidth and processing capacity, CXL is suited for handling the high performance demands of AI servers. Furthermore, the QLC⁶-based enterprise SSDs (eSSDs) developed by SK hynix’s U.S. subsidiary Solidigm offer industry-leading performance and massive capacity. These SSDs are therefore an optimal solution for AI servers that require immense storage space.

⁴High Bandwidth Memory (HBM): HBM is a high-value, high-performance product that revolutionizes data processing speeds by connecting multiple DRAM chips with through-silicon via (TSV).
⁵Compute Express Link (CXL): A PCIe-based next-generation interconnect protocol on which high-performance computing systems are based.
⁶Quadruple Level Cell (QLC): A form of NAND flash memory that can store up to 4 bits of data per memory cell. As QLC contains four times more data than a single level cell, it can facilitate realization of high capacity and raise cost efficiency.

In addition to these server products, SK hynix also offers a range of on-device AI⁷ solutions. As the world’s fastest mobile DRAM, LPDDR5T⁸ is optimized for mobile devices. Offering breakneck operating speed and unparalleled low-power and low-voltage characteristics, LPDDR5T meets the demands for high-performing and energy-efficient mobile DRAMs.

SK hynix’s latest GDDR⁹ solution is also set to be integral for on-device AI PCs. GDDR7 offers significant improvements in bandwidth and power efficiency from its predecessor GDDR6, enabling it to handle rapid and large-capacity data processing for AI inference. Additionally, the company’s PCIe¹⁰ Gen5 SSD PCB01 will be a gamechanger for on-device AI PCs. Boasting the industry’s highest sequential read speed and a rapid sequential write speed, PCB01 can load LLMs required for AI learning and inference in less than one second.

⁷On-device AI: The performance of AI computation and inference directly within devices such as smartphones or PCs, unlike cloud-based AI services that require a remote cloud server.
⁸Low Power Double Data Rate 5 Turbo (LPDDR5T): Low-power DRAM for mobile devices, including smartphones and tablets, aimed at minimizing power consumption and featuring low voltage operation. LPDDR5T is an upgraded product of the 7th generation LPDDR5X and will be succeeded by the 8th generation LPDDR6.
⁹Graphics DDR (GDDR): A standard specification of graphics DRAM defined by the Joint Electron Device Engineering Council (JEDEC) and specialized for processing graphics more quickly. It is now one of the most popular memory chips for AI and big data applications.
¹⁰Peripheral Component Interconnect Express (PCIe): A high-speed input/output interface with a serialization format used on the motherboard of digital devices.

The Unseen Power Behind AI

As the leading AI memory solution provider, SK hynix is committed to driving innovation in AI memory technology to meet the needs of companies worldwide. Having already started mass-producing HBM3E, the company plans to begin mass production of the next-generation HBM4 in 2025. In the AI era when data storage and usage requirements are only increasing, SK hynix’s high-performance solutions are the unseen power enabling AI systems for our data-hungry world.

The post [Brand Video] The Unseen Power Driving Our Data-Centric World in the AI Era first appeared on SK hynix Newsroom.

▲ SK hynix President and CEO Kwak Noh-Jung speaks with employees on the company’s 40th anniversary (From left, Son Aeri, Kwak, Lim Seohyun, and Ma Kyoungsoo)

To commemorate SK hynix’s 40th anniversary on October 10, SK hynix President and CEO Kwak Noh-Jung laid out the company’s vision. “We will transform semiconductor memory, which has generally been considered as a commodity product¹, into customized specialty solutions through continued innovations,” he said. During a special interview, Kwak claimed that “only companies that satisfy customers by breaking away from old methods centered on commodity products will survive.”

The AI era has already brought about swift increases in the capabilities of AI systems and a diversification in the memory specifications required by major tech companies. In this rapidly changing environment, SK hynix is leading the AI memory sector with its innovations, including the world’s first mass production of HBM3² and development of the world’s best-performing HBM3E.

¹Commodity product: In the semiconductor field, commodity products are simple mass-produced chips used for performing repetitive processing routines.

²High Bandwidth Memory (HBM): A high-value, high-performance memory that vertically interconnects multiple DRAM chips, enabling a dramatic increase in data processing speed in comparison to earlier DRAM products. HBM3E is the extended version of the HBM3 and the 5^th generation of its kind.

▲ Kwak talks about the company’s vision with employees

Traditionally, the memory industry has used a low-mix high-volume manufacturing³ system where both DRAM and NAND solutions were developed and quickly produced in large quantities. Although customized technology has been developed in some areas as the memory sector has advanced over recent years, the industry is still largely centered on commodity products.

³Low-Mix High-Volume (LMHV) manufacturing: A production model that enables businesses to produce large volumes of a small number of products.

However, as the pace of technological advancement in AI accelerates with the emergence of generative AI services such as ChatGPT, the industry consensus is that the types of AI services and related training will differ for each company. This will result in distinct memory specifications for companies across the world.

Following the mass production of HBM3E in 2024, Kwak claims that memory specifications will need to be configured in close collaboration with customers in the AI business from the earliest stages. This will entail major industry-wide changes in design and production methods, as well as marketing.

“Going forward, we need to first understand the specialty of each of our customers’ work and then customize the memory to meet their needs,” he said. “That represents a big growth opportunity for us.”

▲ Kwak talks about the opportunities the future holds for SK hynix

For the talk, Kwak was joined by three SK hynix employees who represented different generations. Ma Kyoungsoo, a senior engineer of the Manufacturing and Technology department who has been with the company for more than 30 years and was honored as SK hynix’s first Master⁴ in 2023; Technical Leader Son Aeri of the DRAM Development department who was born in October 1983 when the company was founded; and Technical Leader Lim Seohyun of the NAND Development department who joined the company in 2023, sat down with Kwak to talk about SK hynix’s past, present, and future.

⁴Master: An in-house guru at SK hynix who takes on the role of an advisor, passing on knowledge of the semiconductor manufacturing site to juniors and suggesting solutions to various problems.

▲ Kwak talks to employees about the company’s facilities in Icheon, Cheongju and Yongin

When asked about the company’s future, Kwak first spoke of the potential of facilities in Icheon, Cheongju, and Yongin. Once the first fab in SK hynix’s Yongin cluster becomes operational in 2027, it will join the company’s existing Icheon and Cheongju sites to form a triangle on the map and create an optimized production system which will increase business efficiency.

“When the triangle is completed, SK hynix will become a global semiconductor mecca spread across the three cities,” Kwak said.

Regarding the future of semiconductors, Kwak predicts that there will be a technological convergence between memory, CPUs, and system semiconductors as their boundaries become blurred, and that the applications of memory will broaden. “As products such as PIM⁵, which puts computational functions in the memory itself, become more sophisticated, they are likely to be applied to quantum computing⁶ technology,” he said. “Our ability to lead this shift will be a decisive factor in determining our future.”

Kwak also emphasized that “in the future, we need to pay attention to our surroundings, not just technology or products, and strive to make the world a better place. We need to continue to work toward our environmental goals, such as achieving net zero and RE100⁷, while also thinking about how we can contribute to society and improve our governance system,” Kwak said, adding that he plans to strengthen the company’s ESG management.

⁵Processing-In-Memory (PIM): A next-generation technology that adds computational capabilities to semiconductor memories to solve the problem of data movement congestion in AI and big data processing.

⁶Quantum computing: A computational method that utilizes quantum mechanical phenomena such as entanglement and superposition to solve complex problems faster than traditional computers.

⁷Renewable Electricity 100 (RE100): A global initiative for businesses to procure 100% of electricity via renewable electricity.

▲ Ma talks about how the company has changed over the past 40 years

Kwak also spoke with staff about the company’s evolution over its 40-year history. Ma, who has worked at SK hynix since the early 1990s, cites horizontal corporate culture following the elimination of the hierarchical system as the biggest change. “It has created a work environment with strong communication and flowing ideas,” he said.

“Safety awareness has also increased as much as technical skills. The safety rules have become as detailed as the actual work we do, which has created an environment where everyone can work with peace of mind,” Ma added.

▲ Lim talks about Gen Z’s positive impression of SK hynix

“The company guarantees a wide range of autonomy to its employees, including a flexible work system, making it a place where Gen Z wants to work,” said Lim, who joined the company in 2023.

Kwak responded by praising staff for their ability to work autonomously and use their initiative in the face of adversity. Recalling the early 2000s, he said: “When the company experienced challenges, employees put in great effort and approached their work with a sense of ownership. Looking back, this sense of ownership is in line with our VWBE⁸ philosophy.”

⁸Voluntarily and Willing Brain Engagement (VWBE): One of the employee values emphasized by SK Management System, or SKMS.

▲Son reflects on turning 40 as SK hynix celebrates its 40^th anniversary

“I turn 40 in the same month the company celebrates its 40^th anniversary,” said Son. “When I was younger, I thought that 40 was the age of a mature adult, but now I realize that it’s the age of a young person who needs to develop and grow constantly, both myself and the company. I think we’ve entered the new starting point for further development.”

Kwak also acknowledged the need for the company to continue to grow and progress. “Recent reports show that the average lifespan of a global company is only 15 years, and it’s going to get shorter,” he said. “We can be proud of our 40-year history, but we also have more work to do.”

▲ Kwak thanks the employees for all their hard work

Wrapping up the talk, Kwak thanked all of SK hynix’s employees for making the company’s 40-year history possible. “Our recent industry-leading technologies, including HBM3E, DDR5, LPDDR5, and 321-Layer NAND, are the result of the hard work of our employees, and I would like to take this opportunity to thank them,” he said.

“The current generation is very rational in the way they work, and they are ready to work at 150% of their capabilities, or even more,” he said of the junior members who are becoming the company’s core workers, adding that he is excited about the next 40 years.

Kwak concluded by saying that “we have all excelled as one team, one company, and our goal is to become a global market leader.”

The post [SK hynix’s 40th Anniversary] CEO Kwak Noh-Jung Says Company to Become Specialty Semiconductor Memory Provider for the AI Era first appeared on SK hynix Newsroom.