South Korean company SK Hynix, one of the world’s leading memory makers, has announced a change in its production plans. The company is now giving priority to expanding DDR5 memory production instead of speeding up the development of HBM4 memory.
The decision comes as the market needs more DDR5 memory options and because DDR5 offers better short-term profit margins.
The memory market is currently under heavy pressure. A shortage of DRAM has pushed prices higher and created uncertainty for PC, server, and consumer device manufacturers. SK Hynix believes DDR5 is more profitable and easier to increase in production than HBM memory, which is more difficult and expensive to manufacture. According to estimates, DDR5 profit margins could reach as high as 90% in 2026, making it a strong business choice for the company.
SK Hynix Chooses DDR5 Over HBM4 in Production Shift
The move also affects the high-performance memory market. SK Hynix controls around 40% of the HBM market, which is mainly used for artificial intelligence, supercomputers, and high-end graphics cards. While the transition to HBM4 will take longer, the company still leads this market and does not see an urgent need to speed up HBM4 production because current demand can still be met with HBM3E.
For consumers and hardware makers, the increase in DDR5 production is good news. While memory prices are not expected to fall immediately, the move could help slow future price increases and improve the supply of memory for PCs and servers. Converting existing production lines is also much faster than building new factories, allowing SK Hynix to respond more quickly to market demand.
SK Hynix’s strategy is focused on DDR5 to help reduce the DRAM shortage and strengthen its position in the consumer memory market, which has been heavily affected by rising prices. It remains to be seen how soon this decision will affect the prices of memory products sold in stores.
