Samsung and SK Hynix Ramp Up HBM Production for Surging AI Demand

Samsung and SK Hynix Ramp Up HBM Production for Surging AI Demand

January 5, 2026

South Korean memory chip giants Samsung Electronics and SK Hynix are embarking on a significant expansion of their high-bandwidth memory (HBM) production capacity, aiming to alleviate a critical industry-wide shortage driven by explosive demand from artificial intelligence data centers. This strategic move underscores the pivotal role of advanced memory in powering the current AI boom, where HBM's speed and bandwidth are essential for training and running large language models.

According to industry reports, Samsung plans to increase its HBM production capacity by approximately 50 percent in 2026. Its rival, SK Hynix, has announced an even more aggressive infrastructure investment plan, committing to spend more than four times its previously stated figure. Both companies are constructing new fabrication plants in South Korea to support this growth, with Samsung's P5 facility in Pyeongtaek targeted for 2028 and SK Hynix's M15X plant expected to be operational by mid-2027.

The capacity crunch follows a series of major deals that highlighted the scale of future demand. In October 2025, Samsung and SK Hynix signed a letter of intent with OpenAI to supply up to 900,000 DRAM wafers per month for its ambitious "Stargate" AI data center project. That same month, Samsung entered advanced discussions to supply its next-generation HBM4 chips to Nvidia and later announced an order for 50,000 Nvidia GPUs for its own AI factory. Reflecting on the competitive landscape, Samsung's co-CEO and chip division head Jun Young-hyun noted in a New Year address, "On HBM4 in particular, customers have even stated that 'Samsung is back'." However, he acknowledged the company trails SK Hynix, which held a dominant 53 percent share of the HBM market in Q3 2025 compared to Samsung's 35 percent, according to Counterpoint Research.

This production ramp-up signals a broader industry realignment towards high-margin AI components. The moves by the market leaders are likely to intensify competition and could help ease supply constraints that some analysts forecast may persist for up to two years. The shift is further evidenced by U.S.-based Micron's decision in December 2025 to exit the consumer memory market to focus entirely on AI and data center customers. Collectively, these investments by Samsung and SK Hynix represent a multi-billion-dollar bet on the long-term growth of AI infrastructure, aiming to secure their positions as indispensable suppliers in the global tech ecosystem.

Source: datacenterdynamics