The Unexpected Winner of HBM

As the world increasingly embraces the advancements of artificial intelligence (AI), a remarkable battle is unfolding in the realm of high-bandwidth memory (HBM), a key technology that has captured the attention of industry giantsSamsung, SK Hynix, and Micron Technology are at the forefront of this competition, each recognizing HBM as a vital product in their portfoliosThe surge in demand for HBM is not merely a trend; it has created ripples across the semiconductor sector, fundamentally altering the landscape of memory technologies.

Market analysts from TrendForce predict that the demand for HBM will soar, with a staggering almost 200% year-on-year growth rate expected in 2024, and even doubling again in 2025. This meteoric rise in demand has led both SK Hynix and Micron to declare their 2024 supply already sold out – an indication of the fierce market dynamics at playAmid an overall slump in the memory market in preceding years, these companies have managed to carve out a niche for HBM, signaling its critical role in driving demand for memory solutions.

The market dynamics currently reveal that SK Hynix commands over 50% market share for HBM, while Samsung follows with roughly 40% and Micron's share remains under 10%. Looking specifically at the latest generation HBM3 products, SK Hynix dominates with a market share exceeding 90%, while its rivals Samsung and Micron strive to catch upThis competitive environment is not solely characterized by the trio of firms; it has catalyzed a growing demand for the equipment that produces HBM, leading to a shift in the supply chain and fostering opportunities for various equipment manufacturers.

The manufacturing of HBM necessitates advanced technologies, prominently including through-silicon via (TSV) connections that require specialized etching, deposition, and polishing equipmentAs the industry grapples with increased demand for HBM products, suppliers of these essential tools are poised for growth

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In particular, the back-end processes are witnessing a surge in requirements for thinning and bonding equipment, as the increasingly stacked structures of HBM chips mandate thinner wafers.

A crucial player in this arena is the TC Bonder, a piece of equipment integral to HBM manufacturingIt employs heat and pressure to bond and stack chips onto finished wafers, and its performance significantly impacts the yield and reliability of HBM productionThis is perhaps why the global market for precision TC Bonder equipment was valued at $80 million in 2022, with projections to reach $400 million by 2029 – a compound annual growth rate (CAGR) of an astounding 25.6% during the 2023-2029 periodThe rise of TC Bonder is a testament to the broader success of HBM technology and 3D packaging in the semiconductor market.

In light of these trends, Korean companies such as Hanmi Semiconductor and Samsung's SEMES have begun localizing production of TC Bonder for HBM applications, yet reliance on overseas suppliers remains significantNotable international players include Shinkawa and Toray from Japan, along with Kulicke & Soffa and ASMPT from Singapore, and BESI from the NetherlandsThe supply chain for HBM has swiftly adapted as each of the major manufacturers has begun to establish their own connections for TC Bonder sourcingSamsung’s supply chain includes Shinkawa, Toray, and SEMES, while SK Hynix is sourcing from ASMPT, Hanmi Semiconductor, and Hanwha Precision MachineryMicron is threading a delicate path between Japanese and Korean suppliers, keen to boost its HBM output.

Of particular note is Hanmi Semiconductor’s evolutionFounded in 1980, initially focusing on chip carrier molds and encapsulation devices, Hanmi began collaborating with SK Hynix in 2017 to develop the Dual TC Bonder, designed explicitly for HBM and 2.5D packagingTheir recent innovations, including the super models GRIFFIN and DRAGON, have positioned them as frontrunners in the TC Bonder market, serving crucial solutions for HBM production.

As Hanmi Semiconductor increases its market presence, the capitalization of its impressive growth is hard to ignore

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The company's shares have skyrocketed by nearly 1200% since late 2022, further driven by strategic partnerships and favorable market conditionsAs of this year, the stock price has doubled again, making it one of the standout performers in the MSCI Asia-Pacific Index.

Nevertheless, Hanmi Semiconductor recognizes the need for expansion, planning to enhance its manufacturing capabilitiesA new factory in Incheon, covering over 20,000 square meters, is set to focus on Dual TC Bonder production, showcasing a commitment to meeting rising market demand and securing a stable supply of critical components in light of surging HBM requirements.

In a significant development earlier this year, SK Hynix partnered with Hanmi to sign a 150 billion Won supply contract for TC bonding equipmentThe volume of orders aggregate over 358.7 billion Won, reflecting the critical nature of these devices in HBM production, which sells at approximately 2 billion Won per unitAdditionally, in April, Micron placed its own TC Bonder order with Hanmi worth 22.6 billion Won, emphasizing not just supply chain stability but a shared vision in addressing the rapidly evolving market demands.

As Hanmi expands its product line and enhances its semiconductor backend process equipment, it is also gearing up for a new technology release targeting "hybrid bonding" in 2026. This further investment underscores the company’s proactive stance against ongoing competitive pressures and growth potential, with analysts expecting production capabilities to significantly increase next year due to elevated demand.

Meanwhile, SEMES, a Samsung subsidiary, has successfully delivered nearly 100 TC bonding machines over the past year, indicating strong operational capacity in response to increased production needsDespite existing advantages in technology, SEMES’ competitiveness is noted to be closing in on Hanmi, suggesting a bustling environment in the TC Bonder market.

However, the landscape is not devoid of challenges

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