In the latest artificial intelligence boom, SK hynix will boost sales of its high bandwidth memory, or HBM, a critical chip to generative AI tools, to improve profitability, SK hynix Chief Executive Officer Kwak Noh-jung said at a general shareholders meeting Wednesday.

Concerning the Wall Street Journal's report on SK hynix' plan to invest $4 billion to build an advanced chip packaging facility in Indiana, Kwan said nothing has been decided yet.

"Even if (the market) experiences severe downturn again, the company make its system stable for sound business operation, by coming up with differentiated AI memory solutions, such as the next-generation HBM," Kwak said at the general shareholders meeting, held in the company headquarters in Icheon, Gyeonggi Province.

"The proportion of HBM chip sales among the total DRAM sales will increase by double-digits this year, and it will contribute to profitability."

HBM chips have come into the spotlight as a novel technology stacking DRAM chips vertically to increase data processing speed for graphic processor units. HBM3 is currently widely used, but chipmakers are introducing the extended version, HBM3E.

While the chip maker experienced losses in operation profit for four consecutive quarters in the past, it was able to make a turnaround in the fourth quarter last year, recording an operating profit of 345 billion won, seeing growth in sales of advanced chips such as the HBM3.

"Last year, the price of DRAM products, which make up most of the company's sales, dropped and the demand was low. HBM only took a single-digit share in sales," Kwak said, elaborating on the reasons for the poor sales performance last year.

SK hynix recently announced it has kicked off mass production of the fifth-generation 8-stack HBM3E and has begun delivering the product to Nvidia, faster than rivals Samsung Electronics and Micron Technology. The company also plans to start mass-producing 12-stack HBM3E this year.

For this year's market prospects, Kwak forecast a rosy outlook.

"Consumer confidence is restoring, leading to growth in the demand for IT devices. The competition in the global generative AI market getting fiercer and the demand for AI memory chips is expected to surge," the CEO said.

For the company's NAND memory chip business, SK hynix will change its strategy from focusing on market share to improving profitability this year.

On the company's plan to build an advanced chip packaging facility in the US, Kwak said it is reviewing several regions, but nothing has been decided yet.

“We are reviewing (several regions in the US for the advanced chip packaging facility), but we have not made a final decision. We will inform you when the decision is made,” Kwak told reporters after the general shareholders meeting.

According to the WSJ, the chipmaker chose West Lafayette, Indiana, for its chip facility for its nearby access to Purdue University, home of one of the US’ biggest semiconductor and microelectronics engineering programs.

The envisioned facility is reportedly expected to create about 800 to 1,000 new jobs, and operation could begin in 2028, the WSJ reported, citing people familiar with the matter.

It would also be subject to the US CHIPS Act subsidy program aimed at boosting the domestic chip manufacturing industry. The deadline for firms to apply with the US Commerce Department for subsidies is April 12.

Regarding his recent trip to China, Kwak explained that it was a strategic move to check business conditions there and policy changes.

"Major countries around the world like the US have presidential elections this year. There is a possibility of change in the geopolitical environment depending on the result of the elections, so we will be watching closely for changes in the external environment." Kwak said.

SK hynix is the current leader in the HBM market, securing about 53 percent of market volume, while Samsung takes about 38 percent, according to TrendForce, a market tracker. US-based Micron Technology accounts for the remaining 9 percent share.