Nvidia supplier SK Hynix's shares rally as mass production of latest HBM chips begins

SEOUL : SK Hynix shares jumped more than 9 per cent on Thursday after the South Korean firm started mass production of the most advanced high-bandwidth memory (HBM) chips, pulling ahead in a race to meet demand from an artificial intelligence (AI) boom.

Shares of the world's second-largest memory chipmaker outperformed its bigger rival Samsung Electronics, whose shares rose 4 per cent, also boosted by the bullish outlook for AI demand from Micron overnight.

SK Hynix said in a statement it was the world's first latest-generation HBM product, called HBM3E, with 12 layers and 50 per cent bigger capacity than the previous eight-layer chips.

SK Hynix, which has been the main supplier of HBM chips to Nvidia, said it plans to supply the latest products to unidentified customers by the end of this year.

The competition is heating up to supply HBM chips, which aid in the processing of vast amounts of data to train AI technology and are crucial for Nvidia's graphics processing units.

Samsung Electronics said in July it plans to supply its production-ready HBM3E 12-high units to customers in the second half of this year.

Micron said earlier this month that it was shipping production-capable HBM3E 12-high units to key industry partners for qualification.

The benchmark South Korean stock index rose 1.7 per cent.