SK hynix’s HBM¹ was the superstar of the semiconductor memory industry in 2023. The company’s technological competitiveness led to a record increase in HBM sales and a profitable fourth quarter, signaling a rebound in the market.

Vice President Kitae Kim, head of the HBM Sales & Marketing (S&M) department, significantly contributed to HBM’s successful performance by anticipating market changes, responding to customer needs, and increasing profitability. Kim has extensive experience in semiconductor sales and marketing having managed accounts for major global tech companies, where he drove revenue growth and built strong customer relationships.

He has also been a key figure in maintaining SK hynix’s sales even during unstable market conditions. Kim drove the company’s record operating profit in 2018, and has led the sales division’s downturn task force since 2022 to successfully navigate the recession.

In this third installment of interviews with newly appointed executives, the newsroom spoke with Kim about his vision for strengthening SK hynix’s HBM market leadership and future-proofing the company’s sales strategy.

¹High Bandwidth Memory (HBM): A high-value, high-performance product that possesses much higher data processing speeds compared to existing DRAMs by vertically connecting multiple DRAMs with through-silicon via (TSV). There are five generations of HBM, starting with the original HBM and followed by HBM2, HBM2E, HBM3, and HBM3E—an extended version of HBM3.

Striving for Market Dominance Beyond HBM Leadership

Kim attributes early preparation for the AI era as an important factor in HBM’s market success

“As the AI ecosystem expands with the diversification and sophistication of generative AI services, demand is increasing for HBM—a high-performance and high-capacity memory solution. HBM is a revolutionary product which has challenged the notion that semiconductor memory is only one part of an overall system,” he said. “In particular, SK hynix’s HBM has outstanding competitiveness. Our advanced technology is highly sought after by global tech companies.”

Kim emphasized that HBM’s key sales strength is its advanced technology. This is because it is crucial to first secure the technical specifications required by customers to promptly respond to the surging demand for AI memory. He added that his team’s foresight in detecting and preparing for market changes in advance also proved to be highly effective.

“We had been consistently preparing for the onset of the AI era through efforts in both sales and marketing. We proactively established collaborative relationships with our customers and anticipated the market conditions,” he said. “Building on this foundation, SK hynix was able to establish mass-production infrastructure for HBM faster than anyone else, move forward with product development, and quickly achieve market dominance.”

Having established itself as the HBM market leader by pooling its company-wide capabilities, SK hynix plans to maximize this dominance in 2024. To achieve this goal, the HBM Business division was created to bring together all departments including product design, device, development, mass production, and the HBM S&M department which is led by Kim.

Looking ahead, Kim aims to achieve the milestones needed for the company and division to expand positive relationships with customers and promptly respond to market trends.

Fundamental Technical Capabilities & Shortening Time to Market

Kim underscores the importance of technical competitiveness and rapid time to market to gain an edge in the market

“The most challenging period was the industry downturn that began in 2022,” Kim revealed. The combination of this recession with an unstable global landscape made the situation more difficult.

“As the downturn worsened, the situation became increasingly uncertain. It affected our team members, but we rallied together to overcome the challenges,” he said. “On the sales side, we concentrated on improving profitability. To achieve this goal, we focused our sales capabilities on HBM—an AI server and data center-oriented product. In the process, we worked to strengthen our collaboration with clients, focusing on long-term benefits rather than immediate gains. I believe these collective efforts enabled SK hynix to weather the downturn.”

Despite some lingering external uncertainties, Kim believes that the semiconductor memory market is on an upward trend this year. This is in part due to a recovery in demand from global big tech customers. In addition, the application of AI in more areas including on-device² products such as AI-equipped PCs and smartphones is set to boost demand for not only HBM3E, but also for other products such as DDR5 and LPDDR5T.

Kim emphasized that “technical competitiveness is fundamental, but from a sales perspective, shortening the time to market³ (TTM) is key to maintaining market dominance.”

“Proactively securing customer purchase volumes and negotiating more favorable conditions for our high-quality products are the basics of semiconductor sales operations,” Kim said. “With excellent products in hand, it’s a matter of speed. Our planned production volume of HBM this year has already sold out. Although 2024 has just begun, we’ve already started preparing for 2025 to stay ahead of the market.”

²On-Device AI: AI technology that implements AI capabilities on the device itself instead of proceeding with computation in a physically separated server. With on-device AI, AI functions become more responsive and more customized AI services can be provided as smart devices are capable of independently collecting and computing information.
³Time to market (TTM): The length of time required to develop a product from initial conception to when it is released to the market and available for sale.

Delivering Total Solutions to Customers Through ‘One Team’ Synergy

Kim believes the HBM division’s One Team synergy allows SK hynix to provide total AI memory solutions to its customers

Kim acknowledged that while he feels deep pride as the head of the HBM S&M department for the industry’s number one HBM company, he also feels a great sense of responsibility. The HBM S&M department is comprised of three teams: the HBM Sales team that pursues win-win relationships with customers; the HBM Marketing team that discovers optimal pathfinding through market and industry analysis; and the HBM Planning & Intelligence (P&I) team that maximizes sales and profitability by determining the ideal product and supply strategy to lead the market. This unprecedented integration of teams reflects the company’s commitment to becoming a total AI memory provider that leads market change while also being first to provide tailored solutions to customers.

“Semiconductor sales is a position that requires collaboration with major global tech companies,” he said. “To meet our customers’ expectations, it is essential to provide total solutions that encompass not only technology but also elements including quality control, sales, and marketing. To achieve this, we have started optimizing our organizational operations this year. At a time when the direction set by leaders is crucial, I will do my utmost to lead the way in bringing together the capabilities of each team to maximize our One Team synergy.”

Lastly, Kim expressed optimism and confidence for the coming months in a message to his coworkers.

“In 2024, the time for the long-awaited upturn is getting closer,” he said. “In this new era of progress, I will strive to achieve the best results in our business. I hope that everyone at SK hynix can also realize their aspirations this year.”

<Other articles from this series>

New Leadership Spotlight: SK hynix’s First Female Research Fellow, Vice President Oh Haesoon, on Advancing NAND Flash

New Leadership Spotlight: SK hynix’s Youngest Exec, Lee Donghun, Discusses Spearheading NAND Flash Development

New Leadership Spotlight: Vice President Hoyoung Son Targets SK hynix’s Evolution Into Total AI Memory Provider Through Advanced Packaging Tech

Leadership Spotlight: Deoksin Kil, Head of Material Development, On Achieving Tech Innovation Through Advanced Materials

New Leadership Spotlight: Head of HBM PI Unoh Kwon Aims to Finish SK hynix’s HBM Roadmap & Lead in the AI Era

New Leadership Spotlight: Global RTC Head Jaeyun Yi Aims to Present a New Paradigm for the Future of Semiconductors

New Leadership Spotlight: SK hynix Execs Join Roundtable to Discuss Company’s AI Memory Leadership & Future Market Trends

The post New Leadership Spotlight: Vice President Kitae Kim, Head of HBM Sales & Marketing, on Future-Proofing HBM’s Market Leadership first appeared on SK hynix Newsroom.

You would think that if density is high, storage capacity will be enhanced, and therefore, the semiconductor to be more expensive. But the price of a semiconductor memory chip is not proportional to its density. In fact, it is unrelated to density, or fluctuates inversely to density in the range of one US dollar to eight US dollars. Around 40 leading companies around the world that failed to adapt fell behind. And only three to four companies that manufactures DRAM and NAND, respectively, survived, enjoying the global market for the past decade.

Then, what correlation is there between memory density and the cost of semiconductor products? And what impact does these factors have on the memory semiconductor market?

1. The law of increasing semiconductor memory density, about 1,000 times (2¹⁰) a decade

Figure 1. Yearly comparison of density increase trends between DRAM and NAND

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The density of semiconductor memories began with 1Kbit DRAM in the 1970s and showed a trend of increasing by about 1,000 times (2¹⁰) in every 10 years. The 1980s was the age of the megabit and the 1990s and the 2000s were a time when the megabit increased to the gigabit.

However, the true winner of actual density in memory was NAND, which appeared in early 2000. At first, in the initial stages of NAND, SLC products of less than 1Gbit in capacity, or 128Mbit (Mega: 2²⁰) and 256Mbit, appeared in the market. After a decade, MLC products of about 1,000 times the capacity, or 64Gbit (Giga: 2³⁰) and 128Gbit, became the mainstream. Recently, in the early 2020s, TLC products of terabit (2⁴⁰), which is 1,000 times the Gbit, started to become the mainstream product.

This shows a trend of NAND density increasing by around 1,000 times over 10 to 15 years. With this trend, the era of the petabit (2⁵⁰) (QLC-NAND), which is 1,000 times the terabit, will come in the early 2030s. One book takes up less than 10Mbit and a movie at around 20Gbit, meaning that 1Tbit will allow you to save more than 100,000 books you will read in a lifetime or dozens of movies.

For DRAM, 64Gbit to 128Gbit products (DDR5) have been released recently, maintaining a density of 1/100 times the density of NAND in 2020. It is expected that this gap will widen over time, showing a 1,000-fold gap in 2030 and more than a 10,000-fold gap in 2040.

2. Maximizing density and minimizing chip surface area → Leading prices

Figure 2. Pricing structure of semiconductors

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Suppliers focus on increasing density per chip or the number of chips in a wafer to the maximum to lower the sales price or unit cost of semiconductors. The purpose of increasing density per chip is not only because of the demand for storing as much data as possible in the chip, but also because customers continuously seek a continuous cost down in semiconductors. On the other hand, the reason for increasing the number of chips in a wafer, or Net Die, is because the supplier wishes to achieve cost saving regardless of the demand of the market. In other words, higher specification in density is in line with the common interest of both suppliers and demanders, while the increase in the number of chips or net die purely contributes to the supplier’s profits.

Here, the supplier increases density per chip and net die per wafer to satisfy both needs (high density, cost saving) at the same time, while additionally lowers its profits. This is due to the semiconductor ‘chicken game,’ trying to overwhelm competitors in the market by adopting a strategy of lowering profitability, but increasing market share instead. In this case, the supplier must create an environment where it gains profit, but its competitors lose. This is only possible when there is a significant gap between the supplier’s cost and its competitors’ cost.

A supplier that wins in the cost competition can gain a dominant position in pricing and therefore, suppliers mobilize all capabilities, including technology and sales condition, and pursue a low-cost policy to increase global market share. If this continues, competitors will fail to improve profit structure and inevitably be thrown out of the market. For example, the former global DRAM semiconductor company Elpida Memory and German company Infineon lost in the chicken game and sold its DRAM business or withdrew from the market despite many efforts made at the national level to revive the companies.

2-1. Maximizing density → Forming low cost per production of bit

Figure 3. Lowering production cost of bit by increasing chip density @ chip price set arbitrarily

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Typically, increasing density is about planning a new product, designing based on device technology, and completing its features and reliability accordingly. To increase density, you need to either increase the number of cells physically even if it leads to a slightly larger chip size or increase the number of bits electronically. In semiconductors, physical cells refer to transistors (TR) and therefore, one must make TR smaller or minimize the width of circuit lines that connect TRs. These are some examples of conventional scaling down in semiconductor memories and can be applied to all memories, including DRAM and NAND.

Manufacturing by only increasing the number of bits is a method that differentiates based on the level of storage capacity of electrons within the cells of a certain size. This is not a physical method and therefore has no relevance with the size of TR or circuit linewidth. Increasing number of bits within the physical cell is only an option applicable to NAND. Currently, major NAND products can store three bits of information per cell (triple-level-cell, TLC). DRAM, which stores 1 bit per cell, must lower the cost per bit through physical methods, while 3 bits-per-cell NAND has the upper hand being able to use both physical and electronical methods. Therefore, the leading role in the development of memory density has transferred from DRAM to NAND. For various reasons, DRAM costs more than 10 times NAND in terms of cost per bit.

When the density of a product is increased, the price of the product goes up as well. The incremental price increase, however, is smaller than the incremental density increase. So, even if the price goes up by 1.5 times, the density mostly increases by 4 times (2 to 4 times), meaning that demanders enjoy a gain of more than 2.5-fold. In other words, even if a new semiconductor product is offered at a high price, the density increases more than the incremental price increase, making it beneficial to demanders, while also creating a favorable structure for suppliers by forming a lower price per bit. However, in reality, density increase leads to larger chip size along with other variables. And the launch price, unlike during the planning phase, may vary according to market variables such as the timing of the release.

2-2. Minimizing chip size → Forming low cost per production of chip

Figure 4. Lowering cost per chip by increasing number of chips per wafer
@ number of chips and price set arbitrarily

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Increasing the number of chips per wafer requires minimizing the surface area of chips physically. This requires reducing the width of circuit lines or maximizing cell efficiency to reduce chip size. But narrowing the linewidth of circuits makes the reliability and function of device (TR) vulnerable. Therefore, the design rule is to find the optimal design requirement to increase the number of chips because there is a limit to making cell size smaller.

The design rule, in the narrow sense, refers to the layout of the optimal conditions for conductor linewidth and the physical space between conductor lines, while ensuring the electrical characteristics of the design. However, in the broader sense, design rule refers to setting up the optimal conditions for various factors, including process state, physical form of package, and permitted electrical condition. Maximizing number of chips per wafer can increase the price of wafer per sheet which ultimately helps suppliers reduce cost per chip.

3. The rise and fall of IDM companies

Figure 5. Yearly changes in the number of global DRAM IDM companies
@ excluding companies with less than 3% market share in global DRAM market

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Starting with Intel in 1970, the semiconductor memory business was considered as a profitable business. About 20 American electronic companies entered the business, making it a US-led industry. In the 1980s, around 10 global electronic companies in Japan led by Hitachi also entered the market, creating a booming semiconductor industry. Since then, the semiconductor craze spread to Korea, establishing a 3-pillar structure among Samsung Electronics, SK hynix (former Hyundai Electronics), and LG Semiconductor. Semiconductor also became a good business to almost 10 ITC companies in Europe, including SGS-Thomson Microelectronics. As a result, about 40 companies entered the market from the 1970s to 1990s, but around 10 companies disappeared every decade due to cost-saving war. After two fierce chicken games in the industry, companies that were once outstanding with great technological prowess disappeared from the market. And currently, three DRAM IDM companies (Samsung Electronics, SK hynix, and Micron) and four NAND IDM companies (Samsung Electronics, SK hynix, Kioxia (former Toshiba), and Micron) are solidifying their status and position.

There are several options other than what have been introduced today in increasing density and lowering cost. Measures, including evolving from 2D to 3D, applying EUV and new processing methods, increasing number of bits per cell (NAND), TSV (DRAM) and structural improvements like 4D, are made in multifaceted approach. It is expected that PCRAM, MRAM, ReRAM and other types of new products based on the concept of NAND will contribute as next-generation memories. The strategy of balancing product pricing through cost saving can appear anytime in the demander-favorable market, while suppliers can also take the challenging environment as an opportunity to surpass competitors significantly.

The post The Density, Cost, and Marketing of Semiconductor Memory first appeared on SK hynix Newsroom.

hynix Semiconductor Inc. (“hynix”) today announced the appointment of Ji Bum Kim(“J.B. Kim”) as a new Chief Marketing Officer (“CMO”). J.B. Kim replaces Dae Su Kim, who has currently resigned.

In his new position, J.B. Kim will be responsible for all Sales and Marketing functions at hynix, covering DRAM, NAND Flash, and CMOS Image Sensors.

J.B. Kim has spent 25 years in the semiconductor industry holding management positions in both engineering and marketing. His most recent position was Senior VP of Technical Marketing and Product Planning at hynix where he has worked since 1999. Prior to this, Kim was VP of Technical Marketing at hynix Semiconductor America, a position he held for 4 years.

Kim started his career at LG Semicon, gaining rich experience in semiconductor memory design, process and device engineering, for a period spanning 16 years. LG Semicon merged with Hyundai Electronics in 1999, resulting in the creation of hynix.

“We are pleased to appoint J.B. Kim as a new CMO. Kim will bring valuable engineering and marketing experience to hynix with his knowledge of the emerging technologies and applications. He will greatly help hynix develop new products, enter new markets and expand our customer base,” said Jong Kap Kim, CEO of hynix.

About hynix Semiconductor Inc.

hynix Semiconductor Inc. (HSI) of Icheon, Korea, is the world’s top tier memory semiconductor supplier offering Dynamic Random Access Memory chips (“DRAMs”) , Flash memory chips (“NAND Flash”) and CMOS Image Sensor (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Stock Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about hynix is available at www.hynix.com.

Media Contact

CORPORATE COMMUNICATIONS

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Seong-Ae Park
Phone: +82.2.3459.5325
Fax: +82.2.3459.5333
E-Mail: seongae.park@hynix.com

The post hynix Appoints a New Chief Marketing Officer first appeared on SK hynix Newsroom.