Nvidia and SK Hynix to Collaborate on Multi-Year AI Chip Development Project

Nvidia and SK Hynix Partner on Future Generations of Memory Chips for AI

Nvidia Corp. and SK Hynix Inc. have entered into a multi-year agreement to collaborate on designing future generations of memory chips for AI, a significant development in the highly competitive memory market. As South Korea's leader in memory technology, SK Hynix is set to benefit from this partnership, which will enable the company to diversify into new areas such as infrastructure and physical AI, as well as memory for Nvidia's powerful accelerator, Vera Rubin.

The partnership gives SK Hynix a boost as it prepares to expand into the next generation of high-bandwidth memory, known as HBM4. Nvidia's Chief Executive Officer, Jensen Huang, has confirmed that SK Hynix, along with Samsung Electronics Co. and Micron Technology Inc., has been cleared to supply HBM4, a crucial component for top-end systems. The trio dominates the global market for memory and competes fiercely for a slice of this lucrative business.

According to Bloomberg Intelligence, SK Hynix is poised for a strong sales and profit jump due to its deal to supply Nvidia with a full lineup of DRAM, high-bandwidth memory, and solid-state drives. The AI infrastructure technology partnership between Nvidia and SK Hynix is expected to strengthen SK Hynix's position as a long-term supplier of memory products across multiple AI platforms. The company is likely to supply more generations of HBM for AI inference systems, and sales of DRAM for CPUs and SSDs used to store inference data are expected to grow over the next few years.

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SK Hynix's shares slid 10% on Monday, tracking a broader selloff in Asian tech. However, the company's stock and that of its memory sector rivals have skyrocketed over the past year, driven by surging chip prices. SK Hynix and its peers are racing to supply HBM to Nvidia, which is in turn scrambling to supply the accelerators that hyperscalers such as Meta Platforms Inc. need to train and operate AI services. Memory has emerged as a significant bottleneck for the tech industry, with Arm Holdings Plc CEO Rene Haas describing it as "probably the toughest" challenge to resolve.

As part of its efforts to expand its presence in the Asian market, Nvidia's CEO, Jensen Huang, has been hosting a series of high-profile meetings and dinners with industry leaders in South Korea. Huang has dined with SK Group Chairman Chey Tae-won, as well as gaming studios Krafton Inc. and NC Corp., whose endorsement may be critical to ensuring widespread adoption of Nvidia's RTX Spark chip. Nvidia has also announced a series of tie-ups with big local names, including SK Telecom Co. and Naver Corp. to build AI cloud services, and Doosan Group on robotics.