A power struggle is unfolding in South Korea’s semiconductor industry as SK Hynix seeks to diversify its suppliers of thermal compression bonders (TC bonders), crucial for high-bandwidth memory (HBM) chip production. HBM is created by stacking DRAM chips in eight or twelve layers, with the TC bonder playing a key role by applying heat and pressure to bond these layers together.
This shift is straining SK Hynix’s long-standing relationship with Hanmi Semiconductor, its exclusive supplier of TC bonders, and bringing in challenger Hanwha Semitech. Hanwha’s recent entry into the market has disrupted the industry, escalating tensions and leading to legal disputes.
Semiconductor industry sources reported on April 21 that Hanmi Semiconductor had withdrawn around 50 to 60 employees from SK Hynix’s HBM production lines. These staff members had been responsible for operating the TC bonders and managing production yields. Hanmi has also reportedly raised the price of the TC bonders by around 25% and begun charging for maintenance services, which were previously provided free of charge. SK Hynix and Hanmi Semiconductor co-developed the TC bonder in 2017. Since then, Hanmi has supplied nearly all of SK Hynix’s TC bonder equipment and secured a dominant 70% share of the global market.
The conflict began when SK Hynix placed a 42 billion won ($30 million) order with Hanwha Semitech last month for HBM TC bonder equipment. This marked Hanwha Semitech’s first major supply to SK Hynix since entering the TC bonder market in 2020. Industry analysts see the move as part of SK Hynix’s efforts to diversify its supply chain.
“It’s common for semiconductor companies to work with two or three equipment suppliers,” said one industry insider. “SK Hynix’s decision reflects its intention to reduce dependence on Hanmi Semiconductor.” The chipmaker is said to be aiming for a smooth transition by maintaining working relationships with both companies.
Hanmi Semiconductor reportedly has no major issue with SK Hynix selecting a new equipment supplier, but the choice of Hanwha Semitech has reportedly provoked the company.
Hanmi Semiconductor has filed several lawsuits against Hanwha Semitech. In 2021, it sued a former employee who joined Hanwha for violating the Unfair Competition Prevention Act, winning both at trial and on appeal. In December of last year, Hanmi also sued Hanwha for alleged patent infringement. “Hanmi is expressing its dissatisfaction with SK Hynix through price hikes and service changes, as it now has to compete with a company it is suing,” said one industry insider.
Although SK Hynix is the client, it cannot simply ignore Hanmi Semiconductor’s demands. Hanmi holds a dominant position in the market, and the equipment it provides plays a crucial role in the highly complex HBM manufacturing process. The choice of equipment can significantly impact yield rates. Meanwhile, Hanwha Semitech appears willing to endure legal challenges in order to secure SK Hynix as a key customer and is expected to respond to the situation as it evolves.
The intensifying conflict over HBM manufacturing equipment is driven by the market’s high growth potential. With the AI boom expanding the HBM market, the TC bonder market is projected to triple from $461 million in 2024 to $1.5 billion by 2027, according to J.P. Morgan. One industry insider noted, “Securing SK Hynix alone means dominating the global HBM equipment market.”
The semiconductor equipment industry is closely watching SK Hynix’s orders at the end of this month, as the distribution of TC bonder supply between Hanmi Semiconductor and Hanwha Semitech could determine the future of the conflict. A tech industry insider warned, “We must avoid a situation where domestic companies fight among themselves and lose South Korea’s leadership in the HBM market.”
