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Indonesian Unicorns to Merge, Creating Tech Giant

A Gojek rider transports a passenger in Jakarta - AFP
A Gojek rider transports a passenger in Jakarta - AFP
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Indonesian Unicorns to Merge, Creating Tech Giant

A Gojek rider transports a passenger in Jakarta - AFP
A Gojek rider transports a passenger in Jakarta - AFP

Two of Indonesia's most successful start-ups are to merge, the companies announced on Monday, creating the largest tech firm in the world's fourth most populous country.

Ride-hailing and payments giant Gojek and e-commerce firm Tokopedia -- which generated transactions worth a combined $22 billion in 2020 -- agreed to form the GoTo Group, they said in a statement.

The deal will form an Indonesian tech giant combining e-commerce and financial services with on-demand offerings such as ride-sharing in what will be the first such platform in Southeast Asia.

"The GoTo Group will tap into the huge potential of Southeast Asia's largest economy with its fast-growing middle class and young, tech-savvy population," the statement read, AFP reported.

The companies did not disclose the expected value of the new firm, but said the combined past valuation of Gojek and Tokopedia was $18 billion based on historical fundraising.

The combined business of two of Indonesia's top unicorns -- start-ups with a valuation of more than $1 billion -- will be led by Gojek's Andre Soelistyo as GoTo Group CEO and Tokopedia's Patrick Cao serving as GoTo Group president.

"Today is a truly historic day as we mark the beginning of GoTo and the next phase of growth for Gojek, Tokopedia and GoTo Financial," Soelistyo said in the statement.

"Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential."

The new entity will seek to expand its services to reach underserved areas of Indonesia "where 140 million people have little or no access to the country's financial system", the statement added.

Gojek is a multi-service platform and digital payment platform that was first established as a motorcycle ride-hailing call center in 2010, and has grown to offer deliveries, takeaway food and financial services.

It has since expanded its services into Vietnam, Singapore and Thailand.

In 2019, US research institution CB Insights declared the start-up to be Indonesia's first "decacorn" after its value hit $10 billion.

Tokopedia initially provided an online bridge between merchants and customers but has since expanded into fintech, payments, logistics and retail businesses.

Indonesia's second-biggest unicorn after Gojek, it has a valuation of $7.2 billion.

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Technology

Apple Working on AI Chips for Data Centers

(FILES) This photo taken on October 30, 2023 shows people visiting an Apple store in Shenyang, in China's northeastern Liaoning province. (Photo by AFP) / China OUT
(FILES) This photo taken on October 30, 2023 shows people visiting an Apple store in Shenyang, in China's northeastern Liaoning province. (Photo by AFP) / China OUT
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Apple Working on AI Chips for Data Centers

(FILES) This photo taken on October 30, 2023 shows people visiting an Apple store in Shenyang, in China's northeastern Liaoning province. (Photo by AFP) / China OUT
(FILES) This photo taken on October 30, 2023 shows people visiting an Apple store in Shenyang, in China's northeastern Liaoning province. (Photo by AFP) / China OUT

Apple is developing its own chip to run artificial intelligence software in data centers, the Wall Street Journal reported on Monday, citing people familiar with the matter.
The project, internally codenamed as Project ACDC (Apple Chips in Data Center), aims to leverage Apple's chip design expertise for its server infrastructure, the report said.
Apple, whose shares were 1% higher before the bell on Tuesday, did not respond to a Reuters request for comment.
The company has emerged as a major chip designer in recent years, thanks to the success of its semiconductors that are used in the iPhone, iPads and Mac laptops.
Apple's server chip will likely be focused on running AI models, also known as inference, rather than in training AI models, where Nvidia is dominant, the WSJ report said.
Amid growing pressure due to a slow roll out of AI services, CEO Tim Cook had last week signaled that Apple plans to unveil a raft of features powered by the technology in the coming months.
"We continue to feel very bullish about our opportunity in generative AI and we're making significant investments," Cook told Reuters last week.
The company plans to hold a virtual event on Tuesday where it is expected to showcase new iPad models, some of which could come with a new chip aimed at speeding up AI tasks carried out on the devices.
Project ACDC has been in the works for several years and it is uncertain when the new chip will be unveiled, if ever, the WSJ report said.
Apple has been closely working with Taiwan Semiconductor Manufacturing Co to design and initiate production of such chips and that it remains uncertain whether both companies have yielded a definitive result, the report said.

Technology

Amazon Says Will Invest $9 Billion in Singapore

The Amazon announcement follows a multi-billion-dollar investment in Southeast Asia by Microsoft. MARCO BERTORELLO / AFP
The Amazon announcement follows a multi-billion-dollar investment in Southeast Asia by Microsoft. MARCO BERTORELLO / AFP
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Amazon Says Will Invest $9 Billion in Singapore

The Amazon announcement follows a multi-billion-dollar investment in Southeast Asia by Microsoft. MARCO BERTORELLO / AFP
The Amazon announcement follows a multi-billion-dollar investment in Southeast Asia by Microsoft. MARCO BERTORELLO / AFP

Amazon said Tuesday it would invest US$9 billion in Singapore over the next four years to expand its cloud computing capabilities in the city.
The announcement comes after fellow tech titan Microsoft unveiled billions of dollars of investment in the same sectors in Southeast Asia last week as firms look to take advantage of growing demand in the region.
Amazon said the figure doubles its investment in the city-state and will help it meet growing demand for cloud services and adopt artificial intelligence.

FILE PHOTO: The Microsoft sign is shown on top of the Microsoft Theatre in Los Angeles, California, US October 19,2018. REUTERS/Mike Blake/File Photo

Amazon said the figure doubles its investment in the city-state and will help it meet growing demand for cloud services and adopt artificial intelligence.
"AWS (Amazon Web Services) is doubling down on its cloud infrastructure investments in Singapore from 2024 to 2028 to support customer demand, and help reinforce Singapore’s status as an attractive regional innovation launchpad...," Priscilla Chong, Country Manager of Singapore for AWS, said.
Amazon said its investment will support some 12,000 jobs in Singaporean businesses each year.
It is also partnering with the Singapore government to help local businesses accelerate the adoption of AI.
The e-commerce titan last week said profit in the first three months of 2024 tripled as its cloud, ads, and retail businesses thrived.
The company founded by Jeff Bezos is also testing an AI chatbot named Rufus that provides shopping tips to US mobile app customers.
Meanwhile, generative AI features for sellers help them create product listings.
Tech giants such as Amazon and Microsoft have been investing more in Southeast Asia recently.
Microsoft pledged US$2.2 billion in artificial intelligence and cloud computing investment in Malaysia on Thursday.
That announcement came after tech chief Satya Nadella unveiled a US$1.7 bn investment in Indonesia, as well as Thailand's first data center region.
The tiny but wealthy and infrastructure-rich Singapore has become a business and technology center in Southeast Asia, further solidifying its status after the pandemic.

Technology

Nintendo Says Announcement on Switch Successor 'This Fiscal Year'

Anticipation for a successor to the hugely popular Switch is running high. Richard A. Brooks / AFP
Anticipation for a successor to the hugely popular Switch is running high. Richard A. Brooks / AFP
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Nintendo Says Announcement on Switch Successor 'This Fiscal Year'

Anticipation for a successor to the hugely popular Switch is running high. Richard A. Brooks / AFP
Anticipation for a successor to the hugely popular Switch is running high. Richard A. Brooks / AFP

Nintendo said Tuesday it will make an announcement about a highly anticipated new console by the end of March 2025 as sales decline of the hugely popular Switch, which is now in its eighth year.
Despite logging a record net profit in the year to March, helped by the weak yen, the game giant expects net profit to drop nearly 40 percent in the current financial year.
Players and investors have been hungry for news about a successor to the Switch, and the Japanese company said a statement was finally forthcoming.
"We will make an announcement about the successor to Nintendo Switch within this fiscal year," said a post on social media platform X that was attributed to company president Shuntaro Furukawa.
Nintendo said net profit in 2023-24 totaled 490 billion yen ($3.2 billion) -- beating its previous record of 480 billion set three years ago, when the Switch became a must-have gadget to pass time during pandemic lockdowns.
"Good sales were posted for 'The Legend of Zelda: Tears of the Kingdom'," it said, adding that new titles in the "Super Mario Bros" and "Pikmin" series had also performed well.
The "Super Mario" movie helped sell games from the Mario franchise and there was a "substantial increase in foreign exchange gains and interest income".
The yen has been on a downwards slide, boosting profits for companies such as Nintendo that sell goods overseas.
But the firm expects net profit to drop nearly 40 percent to 300 billion yen in the current financial year.
Hardware sales for 2023-24 totalled 15.7 million units, down nearly 13 percent.
"While this represents a decrease from the previous fiscal year, sales are steady for a platform in its eighth year after launch," Nintendo said, referring to the Switch.
The company said hardware sales were expected to continue to fall in the current financial year to 13.5 million units.
Bloomberg Intelligence analyst Nathan Naidu said before the earnings release that Nintendo consoles typically have a "six-to-seven year lifecycle".
"Given hardware drives about 40 percent of total sales, its drag on (the) overall top line might extend into fiscal 2025 absent a new gaming gadget," he said.
Hideki Yasuda, analyst at Toyo Securities, said investors have been focused on when a new console would be announced.
"It would be a major disappointment if Nintendo couldn't release it by March 2025," he said.

Technology

Paris 2024 Gearing Up to Face Unprecedented Cybersecurity Threat

A cybersecurity employee from the Paris 2024 flying squad manages a simulated cyber attack and pretends to resolve it from a computer on the Olympic site which will host the hockey events at Yves-du-Manoir Stadium in Colombes, near Paris, France, May 3, 2024. (Reuters)
A cybersecurity employee from the Paris 2024 flying squad manages a simulated cyber attack and pretends to resolve it from a computer on the Olympic site which will host the hockey events at Yves-du-Manoir Stadium in Colombes, near Paris, France, May 3, 2024. (Reuters)
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Paris 2024 Gearing Up to Face Unprecedented Cybersecurity Threat

A cybersecurity employee from the Paris 2024 flying squad manages a simulated cyber attack and pretends to resolve it from a computer on the Olympic site which will host the hockey events at Yves-du-Manoir Stadium in Colombes, near Paris, France, May 3, 2024. (Reuters)
A cybersecurity employee from the Paris 2024 flying squad manages a simulated cyber attack and pretends to resolve it from a computer on the Olympic site which will host the hockey events at Yves-du-Manoir Stadium in Colombes, near Paris, France, May 3, 2024. (Reuters)

Paris 2024 is getting ready to face an unprecedented challenge in terms of cybersecurity, with organizers expecting huge pressure on the Games this summer.

Organized crime, activists and states will be the main threats during the July 26-Aug. 11 Olympics and the Aug. 28-Sept. 8 Paralympics.

Paris 2024, who have been working hand in hand with the French national agency for information security (ANSSI), and cybersecurity companies Cisco and Eviden are looking to limit the impact of cyber attacks.

"We can't prevent all the attacks, there will not be Games without attacks but we have to limit their impact on the Olympics," Vincent Strubel, the director general of ANSSI, told reporters.

"There are 500 sites, competition venues and local collectives, and we've tested them all."

Strubel is confident that Paris 2024, who will operate from a cybersecurity operation center in a location that is being kept secret, will be ready.

"The Games are facing an unprecedented level of threat, but we've also done an unprecedented amount of preparation work so I think we're a step ahead of the attackers," he said.

To make sure they are in the game, Paris 2024 have been paying "ethical hackers" to stress test their systems and have been using artificial intelligence to help them do a triage of the threats.

"AI helps us make the difference between a nuisance and a catastrophe," said Franz Regul, managing director for IT at Paris 2024.

"We're expecting the number of cybersecurity events to be multiplied by 10 compared to Tokyo (in 2021)."

"In terms of cybersecurity, four years is the equivalent of a century," Eric Greffier, head of partnerships at CISCO, explained.

In 2018, a computer virus dubbed "Olympic Destroyer" was used in an attack on the opening ceremony of the Pyeongchang Winter Games.

While Moscow denied any involvement, the US Justice Department in 2020 said it has indicted six Russian intelligence agency hackers for a four-year long hacking spree that included attacks against the Pyeongchang Games.

"We would like to have one opponent but we're looking into everything and everyone. Naming the potential attackers is not our role, it is the role of the state," Strubel said.

Last month, French president Emmanuel Macron said he had no doubt Russia would malevolently target the Paris Olympics.

The Games will take place amid a complex global backdrop, including Russia's war in Ukraine and Israel's conflict with Hamas, which has been designated a terrorist organization by the United States and the European Union.

Technology

Foxconn Reiterates Q2 Revenue to Grow, Posts Record April Sales

Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
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Foxconn Reiterates Q2 Revenue to Grow, Posts Record April Sales

Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights

Taiwan's Foxconn, the world's largest contract electronics maker and the biggest assembler of Apple's iPhone, reiterated on Sunday it expected a rise in second-quarter revenue, and reported record sales for the month of April. Foxconn (2317.TW), said in a statement that this year's second quarter "remains a traditional off-peak season, and major products are entering a period of transition between old and new products".

But it added: "The operations outlook for the second quarter is expected to show both quarter-on-quarter and year-on-year growth".

The statement did not elaborate and the company does not give numerical guidance, Reuters reported.

The company, formally called Hon Hai Precision Industry Co Ltd, said April revenue reached T$510.9 billion ($15.83 billion), which it said was the highest figure on record for the same period and represented an on-year rise of 19%.

Revenue in its smart consumer electronics products, including smartphones, in April showed "significant growth" year-on-year, it said.

Strong artificial intelligence (AI) server demand also delivered "strong growth" in April on-year for its cloud and networking products segment, the company added.

The monthly sales data comes ahead of Foxconn's first-quarter earnings call on May 14.

Foxconn has previously reported that for the first quarter, revenue slid 9.6% year-on-year to T$1.322 trillion, underperforming a T$1.401 trillion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate.

The first quarter is traditionally quieter than the previous one, the season when Taiwan's tech companies race to supply smartphones, tablets and other electronics to major vendors such as Apple for Western markets' year-end holiday period.

Apple's (AAPL.O) quarterly results and forecast beat modest expectations on Thursday, and CEO Tim Cook said revenue growth would return in the current quarter.

In March, Foxconn adopted a far more bullish outlook for this year, saying on its fourth-quarter earnings call that it expected a significant rise in revenue driven by booming demand for AI servers.

Foxconn's shares have surged almost 50% so far this year, compared with a 13% gain for the broader market (.TWII.)

Technology

stc Group Named as 'Best Telecommunications and Digital Services Company' in the Middle East

stc Group logo
stc Group logo
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stc Group Named as 'Best Telecommunications and Digital Services Company' in the Middle East

stc Group logo
stc Group logo

Economy Middle East awarded stc Group the "Telecom & Digital Service Provider of the Year" at its 2024 summit.

Held in Abu Dhabi on May 1, Economy Middle East brings together a number of ministers and industry experts from across the private and public sectors under the theme "Accelerating Future Growth". The program focuses on addressing the key challenges and opportunities across banking, finance, technology, hospitality, tourism, and the future of mobility, according to an stc Group statement.

According to the statement, recognizing stc Group as the leading Telecom and digital Service Provider of the year across the region is a testament to the Kingdom of Saudi Arabia's progress in driving digital transformation, domestically and worldwide.

stc Group's focus on innovative technology expands across digital infrastructure, cloud computing, cybersecurity, the Internet of Things (IoT), digital payments, and digital entertainment.

The Economy Middle East Summit award adds to stc Group's exceptional start to 2024. The 2024 Brand Finance Report named stc Group as the leading telecom brand in the Middle East by revenue and ranked the Group as the 149th most valuable brand globally.

Technology

Apple Aims to Tell an AI Story Without AI Bills

FILED - 01 May 2023, Hamburg: The logo of the US technology company Apple can be seen at night at the Apple Store Jungfernstieg in the city center. Photo: Christian Charisius/dpa
FILED - 01 May 2023, Hamburg: The logo of the US technology company Apple can be seen at night at the Apple Store Jungfernstieg in the city center. Photo: Christian Charisius/dpa
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Apple Aims to Tell an AI Story Without AI Bills

FILED - 01 May 2023, Hamburg: The logo of the US technology company Apple can be seen at night at the Apple Store Jungfernstieg in the city center. Photo: Christian Charisius/dpa
FILED - 01 May 2023, Hamburg: The logo of the US technology company Apple can be seen at night at the Apple Store Jungfernstieg in the city center. Photo: Christian Charisius/dpa

For most of the past year and a half, Apple Chief Executive Tim Cook has fielded questions from Wall Street analysts about his plans for artificial intelligence amid grumbling that the iPhone maker has no AI story to tell.
After the company reported quarterly earnings on Thursday, Cook insisted that Apple will have concrete details about its plans for AI to talk about very soon.
"We continue to feel very bullish about our opportunity in generative AI and we're making significant investments," Cook told Reuters in an interview, noting the company has spent $100 billion over the past five years on research and development.
Apple's Big Tech rivals have spent comparable or even greater amounts on R&D over the same period, but they have also been spending heavily to build data centers to host AI services.
Microsoft shelled out $14 billion in the most recent quarter on capex, with Alphabet's Google not far behind, at $12 billion. Meta Platforms told investors last week to expect as much as $40 billion in capital expenditures this year.
Apple thinks different. Its capital expenditure for all of 2023 was just over $10 billion.
Apple, which makes most of its money selling consumer devices, has paid a price for that stance most of this year, with its shares falling 10% as investors worried the company was falling behind in the AI race. Shares of Meta, Google and Microsoft -- all of which make money selling software or advertising services -- have all soared to record highs as the companies grapple to dominate the emerging AI landscape, though investors have also flinched at skyrocketing price tags for data centers and specialized processors required to train AI models.
Apple hinted Thursday it won't take the same tack. While Apple is expected to unveil new AI features at its annual software conference next month and overhaul its product lines with AI-ready chips, Chief Financial Officer Luca Maestri said Apple investors should not expect a huge change in how the company handles capital expenditures.
Responding to an analyst's question, Maestri noted the company's longstanding practice of splitting the cost of manufacturing tools with its suppliers, which has kept Apple's costs down and its cash generation up for more than a decade.
"We do something similar on the data center side," Maestri said. "We have our own data center capacity, and then we use capacity from third parties. It's a model that has worked well for us historically, and we plan to continue along the same lines going forward."
That could be just as well for Apple, because it remains unclear whether AI features such as chatbots that run directly on a device will spur users to buy new phones, tablets or laptops, which remain Apple's biggest source of revenue and profits.
Ben Bajarin of Creative Strategies said that while better processors could serve as a "line in the sand" for some users who need AI tools for professional use, those features may not ignite a sales boom.
"It'll be something that helps lift sales, but I don't expect it to be super cycle," Bajarin said. "You have to be careful to temper expectations."

Technology

Japan’s Kishida Unveils a Framework for Global Regulation of Generative AI

Japanese Prime Minister Fumio Kishida delivers his speech during the Organization for Economic Cooperation and Development (OECD) Ministerial Council Meeting (MCM) in Paris, France, 02 May 2024. (EPA)
Japanese Prime Minister Fumio Kishida delivers his speech during the Organization for Economic Cooperation and Development (OECD) Ministerial Council Meeting (MCM) in Paris, France, 02 May 2024. (EPA)
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Japan’s Kishida Unveils a Framework for Global Regulation of Generative AI

Japanese Prime Minister Fumio Kishida delivers his speech during the Organization for Economic Cooperation and Development (OECD) Ministerial Council Meeting (MCM) in Paris, France, 02 May 2024. (EPA)
Japanese Prime Minister Fumio Kishida delivers his speech during the Organization for Economic Cooperation and Development (OECD) Ministerial Council Meeting (MCM) in Paris, France, 02 May 2024. (EPA)

Japanese Prime Minister Fumio Kishida unveiled an international framework for regulation and use of generative AI on Thursday, adding to global efforts on governance for the rapidly advancing technology.

Kishida made the announcement in a speech at the Paris-based Organization for Economic Cooperation and Development.

“Generative AI has the potential to be a vital tool to further enrich the world,” Kishida said. But “we must also confront the dark side of AI, such as the risk of disinformation."

When Japan chaired the Group of Seven leading industrialized nations last year, it launched a Hiroshima AI process to draw up international guiding principles and a code of conduct for AI developers.

Some 49 countries and regions have signed up to the voluntary framework, called the Hiroshima AI Process Friends Group, Kishida said, without naming any.

They will work on implementing principles and code of conduct to address the risks of generative AI and “promote cooperation to ensure that people all over the world can benefit from the use of safe, secure, and trustworthy AI,” he said.

The European Union, the United States, China and many other nations have been racing to draw up regulations and oversight for AI, while global bodies such as the United Nations have been grappling with how to supervise it.

Technology

Google Defends App Store, Fighting Epic Games’ Bid for Major Reforms

The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, US, January 10, 2024. (Reuters)
The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, US, January 10, 2024. (Reuters)
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Google Defends App Store, Fighting Epic Games’ Bid for Major Reforms

The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, US, January 10, 2024. (Reuters)
The Google logo is seen on the Google house at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, US, January 10, 2024. (Reuters)

Google has asked a US judge not to impose sweeping changes to the Alphabet unit's app store Play that were proposed by "Fortnite" maker Epic Games in the companies' closely-watched antitrust fight.

Google made its filing late on Thursday in San Francisco federal court, where Epic last year persuaded a jury that the tech giant unlawfully stifled competition with its controls over apps downloads on Android devices and payments to developers for in-app transactions.

Epic's proposal "would make it nearly impossible for Google to compete," Google's filing said.

The gaming company in March asked US District Judge James Donato in San Francisco to force Google to make it easier for users to download apps from other sources and to allow developers more flexibility in offering and charging for purchases.

The Cary, North Carolina-based company also said it should be allowed to bring its Epic Games Store to Android "without delays and barriers."

A hearing on the proposed injunction is scheduled for May 23.

Epic did not immediately respond to a request for comment.

Wilson White, Google's head of government affairs and public policy, said in a statement that "Epic’s demands would harm the privacy, security, and overall experience of consumers, developers, and device manufacturers."

In its filing, Google said a related Play store settlement with states and consumers made Epic's bid for an injunction unnecessary. The remedies in that settlement, Google said, "fully address" the alleged anticompetitive conduct Epic presented at trial.

In December, Google agreed to pay $700 million to resolve the states' case and, among other reforms, will allow more alternative billing options for in-app purchases.

In another even more far-reaching antitrust case, Google on Thursday squared off for closing trial arguments with the Justice Department and a group of states in a Washington, DC courtroom over claims that it unfairly dominates the market for mobile web search.

Technology

Nvidia Supplier SK Hynix Says HBM Chips Almost Sold Out for 2025 

Employees walk past identification systems bearing the logos of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. (Reuters) 
Employees walk past identification systems bearing the logos of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. (Reuters) 
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Nvidia Supplier SK Hynix Says HBM Chips Almost Sold Out for 2025 

Employees walk past identification systems bearing the logos of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. (Reuters) 
Employees walk past identification systems bearing the logos of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. (Reuters) 

South Korea's SK Hynix said on Thursday that its high-bandwidth memory (HBM) chips used in AI chipsets were sold out for this year and almost sold out for 2025 as businesses aggressively expand artificial intelligence services.

The Nvidia supplier and the world's second-largest memory chipmaker will begin sending samples of its latest HBM chip, called the 12-layer HBM3E, in May and begin mass producing them in the third quarter.

"The HBM market is expected to continue to grow as data and (AI) model sizes increase," Chief Executive Officer Kwak Noh-Jung told a news conference. "Annual demand growth is expected to be about 60% in the mid-to long-term."

SK Hynix which competes with US rival Micron and domestic behemoth Samsung Electronics in HBM was until March the sole supplier of HBM chips to Nvidia, according to analysts who add that major AI chip purchasers are keen to diversify their suppliers to better maintain operating margins. Nvidia commands some 80% of the AI chip market.

Micron has also said its HBM chips were sold out for 2024 and that the majority of its 2025 supply was already allocated. It plans to provide samples for its 12-layer HBM3E chips to customers in March.

"As AI functions and performance are being upgraded faster than expected, customer demand for ultra-high-performance chips such as the 12-layer chips appear to be increasing faster than for 8-layer HBM3Es," said Jeff Kim, head of research at KB Securities.

Samsung Electronics, which plans to produce its HBM3E 12-layer chips in the second quarter, said this week that this year's shipments of HBM chips are expected to increase more than three-fold and it has completed supply discussions with customers. It did not elaborate further.

Last month, SK Hynix announced a $3.87 billion plan to build an advanced chip packaging plant in the US state of Indiana with an HBM chip line and a 5.3 trillion won ($3.9 billion) investment in a new DRAM chip factory at home with a focus on HBMs.

Kwak said investment in HBM differed from past patterns in the memory chip industry in that capacity is being increased after making certain of demand first.

By 2028, the portion of chips made for AI, such as HBM and high-capacity DRAM modules, is expected to account for 61% of all memory volume in terms of value from about 5% in 2023, SK Hynix's head of AI infrastructure Justin Kim said.

Last week, SK Hynix said in a post-earnings conference call that there may be a shortage of regular memory chips for smartphones, personal computers and network servers by the year's end if demand for tech devices exceeds expectations.