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CNA
10-08-2025
- Business
- CNA
Exclusive-SK Hynix expects AI memory market to grow 30% a year to 2030
SEOUL/SAN FRANCISCO :South Korea's SK Hynix forecasts that the market for a specialized form of memory chip designed for artificial intelligence will grow 30 per cent a year until 2030, a senior executive said in an interview with Reuters. The upbeat projection for global growth in high-bandwidth memory (HBM) for use in AI brushes off concern over rising price pressures in a sector that for decades has been treated like commodities such as oil or coal. "AI demand from the end user is pretty much, very firm and strong," said SK Hynix's Choi Joon-yong, the head of HBM business planning at SK Hynix. The billions of dollars in AI capital spending that cloud computing companies such as Amazon, Microsoft and Alphabet's Google are projecting will likely be revised upwards in the future, which would be "positive" for the HBM market, Choi said. The relationship between AI build-outs and HBM purchases is "very straightforward" and there is a correlation between the two, Choi said. SK Hynix's projections are conservative and include constraints such as available energy, he said. But the memory business is undergoing a significant strategic change during this period as well. HBM - a type of dynamic random access memory or DRAM standard first produced in 2013 - involves stacking chips vertically to save space and reduce power consumption, helping to process the large volumes of data generated by complex AI applications. SK Hynix expects this market for custom HBM to grow to tens of billions of dollars by 2030, Choi said. Due to technological changes in the way SK Hynix and rivals such as Micron Technology and Samsung Electronics build next-generation HBM4, their products include a customer-specific logic die, or "base die", that helps manage the memory. That means it is no longer possible to easily replace a rival's memory product with a nearly identical chip or product. Part of SK Hynix's optimism for future HBM market growth includes the likelihood that customers will want even further customisation than what SK Hynix already does, Choi said. At the moment it is mostly larger customers such as Nvidia that receive individual customisation, while smaller clients get a traditional one-size-fits-all approach. "Each customer has different taste," Choi said, adding that some want specific performance or power characteristics. SK Hynix is currently the main HBM supplier to Nvidia, although Samsung and Micron supply it with smaller volumes. Last week, Samsung cautioned during its earnings conference call that current generation HBM3E supply would likely outpace demand growth in the near term, a shift that could weigh on prices. "We are confident to provide, to make the right competitive product to the customers," Choi said. 100 per cent TARIFFS U.S. President Donald Trump on Wednesday said the United States would impose a tariff of about 100 per cent on semiconductor chips imported from countries not producing in America or planning to do so. Choi declined to comment on the tariffs. Trump told reporters in the Oval Office the new tariff rate would apply to "all chips and semiconductors coming into the United States," but would not apply to companies that were already manufacturing in the United States or had made a commitment to do so. Trump's comments were not a formal tariff announcement, and the president offered no further specifics. South Korea's top trade envoy Yeo Han-koo said on Thursday that Samsung Electronics and SK Hynix would not be subject to the 100 per cent tariffs on chips if they were implemented. Samsung has invested in two chip fabrication plants in Austin and Taylor, Texas, and SK Hynix has announced plans to build an advanced chip packaging plant and an artificial intelligence research and development facility in Indiana. South Korea's chip exports to the United States were valued at $10.7 billion last year, accounting for 7.5 per cent of its total chip exports. Some HBM chips are exported to Taiwan for packaging, accounting for 18 per cent of South Korea's chip exports in 2024, a 127 per cent increase from the previous year.
Yahoo
27-07-2025
- Business
- Yahoo
Prediction: This Unstoppable Artificial Intelligence (AI) Stock Will Join Nvidia, Microsoft, Apple, Amazon, and Alphabet in the $2 Trillion Club by Year's End
Key Points The $2 trillion club is full of businesses benefitting from the growing demand for artificial intelligence. The company I'm eyeing is developing its own AI capabilities that serve multiple cases across its business with huge revenue opportunities. The stock trades for a fair value, and even slight outperformance could push it into $2 trillion territory. 10 stocks we like better than Meta Platforms › Nvidia recently became the first ever $4 trillion company in the world. Its rapid ascension in value stems from growing demand for artificial intelligence. But Nvidia isn't the only company that's seen its market value soar to multitrillion-dollar levels on the back of AI-fueled growth. The three biggest cloud computing providers -- Amazon, Microsoft, and Alphabet -- all boast market caps above $2 trillion. Meanwhile, Apple remains one of the most valuable companies in the world as it works to catch up on its AI capabilities. But the $2 trillion club may be about to get a little bigger. One company is showing strong financial results stemming from the rapid advancements of artificial intelligence over the last few years. In fact, I predict it will surpass the $2 trillion market cap milestone before the end of the year. Here's the AI giant that could join the $2 trillion club. One of the biggest beneficiaries of generative AI capabilities I predict that the next member of the $2 trillion club will be Meta Platforms (NASDAQ: META). Not only does it already have a market cap of roughly $1.8 trillion as of this writing on July 24 -- which puts it about 11% from $2 trillion -- but the stock currently looks undervalued relative to the potential opportunities. AI could boost its revenue in the near term while opening up even bigger opportunities in the long run. During Meta's first-quarter earnings call on April 30, CEO Mark Zuckerberg laid out five major opportunities for the company with AI. Improved advertising: Meta has long used machine learning algorithms to help surface advertisements amid organic content to drive maximum engagement. That's led to steady improvements in ad pricing for the company. It's also rolled out generative AI tools that help marketers come up with creatives (ads). In the pipeline, Meta's developing an AI agent that can take a marketer's objective and budget and create and run the entire campaign for them. That has the potential to save marketers money and increase the total number of companies running ads on Meta's properties, further pushing ad prices higher. More engaging experiences: Zuckerberg details two benefits of AI: better recommendations and new types of content. Meta has expanded its AI model to include more data points across all different types of content to improve recommendations across every surface of its apps, including Facebook, Instagram, and WhatsApp. As it grows the model bigger and bigger, it's getting better and better at engaging users. That's only possible because it now has the compute power to support its large language model development. Zuckerberg also expects generative AI tools to provide new ways for creators to produce better content for users. Everything from existing content like photos and videos can be manipulated with AI, and generative AI could enable creators to produce more interactive content as well. Business messaging: Meta's WhatsApp for Business is a relatively small source of income right now. But as Meta improves its AI agent capabilities, it reduces the cost for businesses to provide customer service and sales through WhatsApp and Messenger. That could lead to a surge in WhatsApp for Business users. One analyst thinks AI agents alone are a $100 billion opportunity for Meta. A stand-alone AI chatbot: Meta has integrated the Meta AI assistant into all of its main apps and released a stand-alone version of the app as well. As the user base grows, it could provide another source of valuable advertising inventory. Importantly, since Meta is developing its own large language model for the above applications already, the additional cost of building and running a stand-alone AI chatbot is far lower than for dedicated AI companies like OpenAI or Anthropic. Devices: Zuckerberg points out the growing popularity of Meta's AI glasses. Unit sales tripled in the first quarter. Longer term, generative AI may be essential for creating an augmented reality user interface that fits into the unique setting of each user. Indeed, AI has the potential to dramatically impact Meta's financials in a positive direction in the near term while supporting its long-term objectives in virtual and augmented reality. The stock looks like a bargain right now The above factors should be able to generate strong double-digit revenue growth for Meta for years to come. The company saw 16% revenue growth last quarter, while exhibiting nice operating leverage. As a result, operating income climbed 27% year over year. The big step up in capital expenditures could weigh on earnings growth for the next couple of years as depreciation expense climbs as a result. But as the company grows into those expenses, it should continue to show operating leverage. Meta's also using excess cash flow to repurchase shares. It bought back $13.4 billion worth of its stock in the first quarter, and it still has $70 billion in cash on the balance sheet. As a result, the company should be able to generate strong earnings-per-share growth. As of this writing, the stock trades for 28 times earnings. Considering the growth potential ahead for the stock, that's an enticing price for investors. To push the stock to $2 trillion, it would have to trade for closer to 31 times earnings, which isn't an unreasonable multiple for the stock. But if Meta ends up outperforming expectations, it could trade for the same multiple and still achieve a $2 trillion valuation. I expect a combination of multiple expansion and outperformance to drive the stock to $2 trillion before the end of the year. Should you buy stock in Meta Platforms right now? Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Adam Levy has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Prediction: This Unstoppable Artificial Intelligence (AI) Stock Will Join Nvidia, Microsoft, Apple, Amazon, and Alphabet in the $2 Trillion Club by Year's End was originally published by The Motley Fool Sign in to access your portfolio
