HBM4 and the Custom Base DieNarrow moat
SK hynix (SKHY) — moat facet
Memory is becoming a logic problem, and a part designed to one buyer's specification is priced by negotiation rather than by a spot market.
HBM4 is not simply a faster stack. It introduces something more interesting: a base die that can carry functions specified by the customer, integrating parts of what a GPU or ASIC would otherwise do into the memory package itself1.
That is a meaningful shift in what SK hynix sells. A standard part is interchangeable by definition; a base die designed to one customer's requirements is not. It moves the company a step toward the position Broadcom occupies in custom silicon — co-developing something the customer cannot simply buy elsewhere — and it deepens the engineering relationship in a way that ordinary memory never has.
SK hynix developed HBM4 in 2025 and began mass shipments in the second quarter of 2026, with the ramp weighted to the second half2.
The cost of customisation is the mirror of its benefit. A part built to one customer's specification cannot be sold to another, which converts inventory risk from a market problem into a counterparty problem, and it ties the supplier's capacity planning to one buyer's roadmap. It also invites the customer to think of the base die as its own intellectual property, which over time is an argument about who captures the value.
The number to watch is the share of HBM revenue that is customised rather than standard. Rising means deeper relationships and thinner optionality, both at once.
Moving the base die onto a logic process and configuring it per customer takes HBM further from a catalogue part with every generation. A component co-developed for one buyer is not priced against a spot market.
HBM4 mass shipments began in the quarter with a base die made by TSMC. Growth continuing as HBM4 ramps would show the partnership working; a stall would point to the new generation.
Source: SK hynix Q2 2026 results ↗- ReportedCustom HBM is defined as a product integrating certain functions of GPUs and ASICs into the HBM base die, configured to reflect customer requirements.SK hynix Inc., Form 424B4 prospectus — risk factors and the offering (SEC, CIK 2120882). 'A substantial portion of our sales is attributable to a limited number of customers located in the United States and China. Our two largest customers represented 14.8% and 12.4%, respectively, of our total revenue in the first quarter of 2026 and our largest customer represented 23.9% of our total revenue in 2025.' DRAM products were 77.3% of total sales in Q1 2026 and 77.1% in 2025; NAND flash 22.0% and 21.3%. NAND mass production is transitioning from 176-layer technology to 238- and 321-layer technologies. The offering was 177,900,000 ADSs at US$149.00 each, representing 17,790,000 common shares against 712,702,365 outstanding, each ADS one-tenth of a share; Baillie Gifford Overseas, funds managed by Coatue Management and Situational Awareness Partners indicated a non-binding interest of up to US$7 billion. — FY2025 and Q1 2026 · publ. 2026-07-10 · source ↗
- ReportedSK hynix began mass shipments of HBM4 in the second quarter of 2026, ramping production in the second half.SK hynix newsroom — 2Q26 business results. Both DRAM and NAND flash prices rose quarter on quarter, and the company began mass shipments of HBM4 during the second quarter, ramping production in the second half. — Q2 2026 · publ. 2026-07-29 · source ↗