SK Hynix considers Intel for HBM4E base dies: What are the implications for TSMC?

SK Hynix is mulling a potential switch to Intel Foundry for HBM4E base dies, according to Korea's Herald Economy. While the immediate financial impact for TSMC would be minimal, the move could signal a shift in the industry's reliance on a single advanced-logic supplier. TSMC's market value stands at $1.95 trillion, but the potential ramifications of this development are more nuanced.

At around 3-4 times the cost of a core DRAM die, HBM base dies constitute a relatively small portion of TSMC's revenue. Consequently, losing SK Hynix's orders for HBM4E base dies would not significantly dent TSMC's top line. However, the real question lies in the precedent and optionality set by this potential partnership.

SK Hynix has already shipped 12-layer HBM4E samples to major customers in June, and NVIDIA has committed a staggering $279 billion in multi-year memory purchases. The economics of this scenario suggest that even a slight reduction in base die costs could make a meaningful difference for memory manufacturers.

Intel Foundry may offer a more cost-effective alternative on a mature node, potentially circumventing TSMC's dominant pricing power. For SK Hynix, diversifying its supplier base is a prudent move, particularly following recent HBM4 shipment delays that allowed Samsung to gain market share.

While this development is not a direct threat to TSMC's advanced logic business, it serves as a reminder of the strategic importance of maintaining flexibility in the supply chain. TSMC's stronghold in cutting-edge logic fabrication gives memory companies limited options for their advanced-logic requirements. Therefore, Intel winning HBM base die work would mark a validation milestone for Intel Foundry and represent a modest diversification boon for SK Hynix. For TSMC, it underscores the resilience of its moat in the advanced logic domain.