SK Hynix Margin Tops TSMC as Micron Misses Out on Nvidia Orders, Is the HBM Sector Facing a Shake-Up?

TradingKey - Recently, multiple research reports have pointed out changes in the supply structure of the HBM market: Micron (MU) due to a strategic error in its choice of technological roadmap, has been excluded by Nvidia (NVDA) from its supply chain, while competitors SK Hynix and Samsung Electronics are set to capture the entire market share.

Meanwhile, SK Hynix's latest earnings report shows that its fourth-quarter operating margin reached 58%, surpassing the foundry giant TSMC (TSM) .

Samsung, which had fallen behind during the HBM3 era, has returned to the main stage, while Micron, once a leader, has missed out on Nvidia's orders. Is the HBM sector facing a reshuffle?

The HBM Premium

SK Hynix's Q4 earnings report shows that quarterly operating profit more than doubled year-over-year to a record 19.2 trillion won ($13.5 billion), driving full-year 2025 revenue, operating profit, and net profit to all-time highs. This report not only shows SK Hynix surpassing its own records but also outperforming its rivals: its 58.4% operating margin exceeded TSMC's 54% for the same period, and its annual operating profit surpassed that of Samsung.

Analysts believe the record-breaking performance was primarily driven by High Bandwidth Memory (HBM), with full-year HBM revenue increasing more than twofold year-over-year.

Since 2025, the growth in AI demand has led to a surge in demand for high-performance memory. Since SK Hynix became the first in the industry to mass-produce HBM4 in September 2024 and is the only company capable of simultaneously providing a stable supply of both HBM3E and HBM4, the company possesses immense bargaining power in the HBM sector, which is the direct cause of its significant HBM revenue growth.

Furthermore, since the second half of 2025, memory chips have entered a new bull cycle, with both average selling prices and shipment volumes increasing significantly. The average selling price of traditional DRAM chips rose by approximately 25% quarter-over-quarter in Q4, while NAND flash increased by over 30%, both of which boosted SK Hynix's profit margins.

Micron’s Strategic Misstep

Currently, SK Hynix has captured more than half of the global HBM market share, overtaking long-time rivals such as Samsung and Micron, and has become Nvidia's primary supplier. In addition, SK Hynix has entered Microsoft's (MSFT) in-house AI chip supply chain, further demonstrating its dominant position.

According to sources, in the HBM4 supply allocation for Nvidia's Rubin platform, SK Hynix will hold a 70% core share, while Samsung has secured 20%-30% of the initial orders.

From a technical perspective, SK Hynix's HBM4 samples have achieved a stable transmission rate of 10Gbps, while Samsung, through its integrated 1c DRAM and 4nm logic die technology, successfully broke the 11.7Gbps rate barrier. Both are significantly higher than Micron's current technical level.

Supply chain information suggests that Micron's HBM4 base die failed to meet heat dissipation standards, and its pin speed did not reach the 11Gbps benchmark. This is attributed to the company's decision to conduct independent research instead of seeking logic die foundry services from TSMC like its competitors. Currently, Nvidia's Vera Rubin chips have entered the production phase, with the supply chain certification process largely completed by January 2026, meaning Micron has missed the final window of opportunity for this year.

A Two-Player Race?

By leveraging its first-mover advantage in mass-producing HBM4, SK Hynix not only leads competitors Micron and Samsung in market share and profit margins but also outperforms the foundry king TSMC in profitability. In other words, it has captured the high premium that previously belonged to TSMC's advanced chip processes. This highlights that while we are in the era of chips, we are even more so in the era of HBM chips.

Unlike standard chips, HBM is characterized by high technical complexity and low yields, resulting in higher entry barriers and greater bargaining power. As a leader in this field, SK Hynix controls the overall packaging and core memory granules, becoming Nvidia's most critical HBM chip supplier and thus enjoying a higher premium.

Although Micron and Samsung are temporarily trailing, it remains to be seen how long this situation will last, as both companies remain SK Hynix's strongest rivals.

Samsung's greatest competitive edge lies in its ability to not only provide HBM4 process technology but also produce memory granules, manufacture base dies, and complete packaging in-house, lowering manufacturing costs to achieve a price advantage. This synergy is something Hynix and Micron cannot replicate. Furthermore, Samsung's technical breakthroughs over the past few years should not be underestimated; while its HBM3 and HBM3E chips failed to pass Nvidia's technical certification in 2024, it has already secured a 20%-30% share of Nvidia's orders by 2026.

Currently, Micron plans to collaborate with TSMC and expects a surge in HBM4 capacity in Q2. Analysts believe it could attempt to pass Nvidia's certification tests again as early as Q2. Micron's HBM4 sample pin speeds have exceeded 11Gbps, and power consumption control has always been a traditional advantage for the company. If it successfully passes Nvidia's verification, Micron could still shine during the chip cycle from the second half of 2026 into 2027.