SK Hynix has won a large order to supply high-bandwidth memory (HBM) to Broadcom, TheElec has learned.

Broadcom will procure the memory chips from SK Hynix to install on the AI computing chip of a Big Tech company, sources said.

SK Hynix is expected to supply the chip in the second half of next year. Broadcom actively approached the South Korean memory chip giant, the largest HBM supplier in the world, to procure verified HBMs, the sources also said.

SK Hynix will now surely adjust its DRAM production capacity projection as it now suppliers HBM to both Nvidia and Broadcom. It is currently supplies the majority of HBM used by Nvidia for their AI accelerators.

The South Korean firm aimed to expand its 1b DRAM, which is used as the core die in its HBM, production capacity to 140,000 to 150,000 300mm wafers next year.

But with the new Broadcom deal, this is expected to increase to 160,000 to 170,000 300mm wafers.

SK Hynix could also push back the timeline of its 1c DRAM (the followup to 1b DRAM) equipment installation to meet this new immediate demand first.

Broadcom is viewed as a potential rival to challenge Nvidia, which dominates the current AI chip market. While it doesn’t manufacture its own AI chips like Nvidia, it manufactures application specific ICs designed by Big Tech customers.

Broadcom said earlier this month that it was developing AI chips with three large cloud service providers __ likely Google, Meta, and ByteDance. 

Unconfirmed reports also say Broadcom is working with Apple and OpenAI to develop AI chips. The company exceeded 1 trillion won valuation from these upbeat forecasts.

Broadcom’s AI accelerator is expected to use NPU, or neural processing unit, sources said. Nvidia’s use general-purpose GPUs but NPUs are designed for specific purposes, which can offer it advantage in time, cost, and power efficiency.

Meanwhile, SK Hynix said in October during the conference call for the third quarter that it expects HBM to account for 40% of its DRAM revenue in the fourth quarter. This is expected to go up further with the Broadcom deal. SK Hynix said during the call that demand for HBM3E from customers was rising faster than expected and that it was focused on expanding its production capacity.

A SK Hynix spokesperson declined to comment on its customers.