SK Hynix is reportedly evaluating Intel's foundry options in an effort to reduce HBM costs.

SK Hynix is seeking to diversify its supply chain for key high-bandwidth memory components by bringing Intel into its foundry system in order to reduce costs and improve its bargaining power.

According to South Korea's Herald Business, SK Hynix plans to shift the manufacturing of its base dies, previously entirely outsourced to TSMC, to Intel, starting with its seventh-generation high-bandwidth memory HBM4E, thus building a multi-supplier system. This move aims to break its sole reliance on TSMC and alleviate the pressure of continuously rising raw material costs within a long-term supply contract framework.

This adjustment has a direct impact on the HBM supply chain landscape. The base chip, the controller chip at the bottom of the HBM architecture, is responsible for connecting external processors such as GPUs and CPUs to the HBM via a high-speed data interface. Its technical specifications and cost directly affect the overall product competitiveness. If Intel officially enters this supply chain, it will break TSMC's monopoly in this crucial link.

Cost pressure is the core driving force

The cost of raw materials for the base chips is a direct incentive for SK Hynix to diversify its suppliers. According to industry insiders, the base chips produced by TSMC using a 12-nanometer process in the currently mass-produced HBM4 cost 3 to 4 times more than the core chips (Core Die) manufactured by SK Hynix itself using a 1b (10-nanometer fifth-generation) process.

With the advent of the HBM4E generation, the cost burden of base chips is expected to increase further. Due to the high proportion of long-term supply agreements (LTAs) in HBM products, the increase in foundry costs cannot be immediately passed on to the selling price of end products, putting significant pressure on SK Hynix in terms of cost control. Introducing Intel as a second supplier helps to lower procurement prices through competition and enhance supply stability.

Strategic Layout: From Single Dependence to Diversified Ecosystem

Behind this supply chain adjustment lies a deeper strategic consideration. With the increasing demand for "customized HBM" starting from the HBM4 generation—that is, differentiated design of base chips according to the architecture and performance requirements of different customers' AI accelerators—SK Hynix needs to have the flexibility to cooperate with a wider range of AI chip manufacturers.

Over-reliance on a single foundry can limit SK Hynix's ability to serve diverse customers. By building a multi-supplier system, SK Hynix can flexibly allocate resources between different customer needs and different foundry processes, thereby gaining a more proactive position in the increasingly competitive AI chip supply chain.

The scope of cooperation may extend to the field of advanced packaging.

According to reports, the potential collaboration between SK Hynix and Intel may extend beyond basic chip manufacturing to include advanced packaging technologies. Lee Jae-shin, Vice President of Packaging Engineering for SK Hynix Americas, stated at the "Hot Chips" conference on high-performance semiconductors and computing architectures in Silicon Valley that the company is conducting comparative analysis and testing of mainstream advanced packaging solutions such as TSMC's CoWoS-S and CoWoS-L, and Intel's EMIB.

This means that Intel's EMIB packaging technology has entered SK Hynix's technology evaluation scope, and the boundaries of cooperation between the two parties may be further expanded as the technology roadmap progresses.

In response, SK Hynix stated that "the details of the company's technology roadmap are difficult to confirm" and that "some of the content is inconsistent with the facts," without providing a direct confirmation.

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