SK Hynix's overtaking of Samsung Electronics to become South Korea's most valuable firm was the culmination of 14 years of bets that brought it skepticism and scorn but ultimately put it at the center of the global AI gold rush.
In 2012, conglomerate SK Group acquired Hynix Semiconductor in a deal that was considered financially irresponsible. Samsung, in contrast, was valued at more than 10 times SK Hynix and was the global leader in Dynamic Random-Access Memory (DRAM), a memory type that powers laptops and smartphones.
Eager to find an edge, SK Hynix bet on a different memory type that was considered niche: high-bandwidth memory chips (HBM), which could feed data fast but were not widely used by data center customers.
It released the world's first HBM product with Advanced Micro Devices in 2014, but stumbled with the chip's second generation, falling behind Samsung in the late 2010s. That prompted executives to debate whether to halt HBM development, two ex-executives said.
They eventually decided to double down, revamping their technology and investing heavily in new production capacity as they expected growing demand from Nvidia - back then known as a supplier of 3D graphic chips to the computing and video game markets - said Shim Dae-yong, who led HBM development at SK Hynix at the time.
That gamble, which involved an 880 billion won ($640 million) investment into a packaging facility in Icheon and other assets, initially appeared to backfire. That facility struggled with underutilization in 2019 as demand from Nvidia and cryptocurrency miners plummeted.
"It was a headache back in 2019," Shim said. "It was obsolete."
But it eventually paid off when OpenAI's ChatGPT release in 2022 ignited the artificial intelligence boom and global demand for HBM chips, which became critical to Nvidia's AI accelerators used in data centers to train and run AI models.
Today, SK Hynix is Nvidia's main HBM supplier.
"No one expected the HBM market would post such explosive growth," Shim said. "But we were ready in terms of performance and capacity."
Reuters spoke to three ex-SK Hynix executives including Shim and reviewed two books on the firm to help illustrate its early days and meteoric rise.
SK Hynix declined to comment on Reuters' questions about this story.
South Korea's stock market has been volatile of late and SK Hynix's market cap fell below Samsung's on Wednesday.
CRISIS-RIDDEN
Founded in 1983 as Hyundai Electronics, the firm went through crises and acquisitions before it became SK Hynix.
In 2001, it flirted with bankruptcy as chip prices plummeted before creditor banks, led by state lenders, rescued it.
The creditors then tried to sell their stakes several times, including to Micron Technology in 2002, a decision that was rejected by the company's board.
SK Group, then known for its telecoms and energy businesses, bought Hynix a decade later in a deal that prompted Standard & Poor's Ratings Services to assign SK Telecom a negative outlook, warning of the highly cyclical nature of the semiconductor industry and large capital expenditure requirements.
SK Group Chairman Chey Tae-won explained his thinking in a book published in January.
"What I really wanted to accomplish when we acquired Hynix was to transform it from a commodity memory producer into a mainstream semiconductor company whose products are indispensable," Chey said.
Hyun Sun-yeop, a former SK Hynix HR executive, said its underdog status made it work harder.
"We believed that it would be impossible to overcome Samsung in commodity DRAM products," he said. "We were desperate to change the market dynamics. We needed a breakthrough."
Its focus on HBM later helped SK Hynix recover from the global memory industry's boom-and-bust cycle faster than Samsung. In 2023, a severe downturn battered memory prices, pushing SK Hynix to report an annual operating loss of 7.73 trillion won.
In 2024, the company posted a record operating profit and it briefly overtook Samsung as the world's top DRAM maker in 2025.
"No one would ever have imagined that SK Hynix would overtake Samsung," said Shin Jae-yong, a business administration professor at Seoul National University.
"It is almost impossible for a runner-up to catch up with the market leader in this capital-intensive industry, which requires massive investment. HBM was the powerful driver behind how they turned the tables."
Today, Samsung is playing catch-up. Its in-house foundry business supplies key components for HBM chips, while SK Hynix relies on Taiwan Semiconductor Manufacturing to produce the so-called base die using less advanced technology.
SK Hynix's fortunes helped power South Korea's economy, its stock market and made its employees attractive marriage material. It is preparing to list shares in the US as soon as August to broaden its investor base, Reuters has reported.
It has also outpaced the expectations of its top bosses, with shares rallying more than 340% this year.
In 2024, Chey, the SK Group chair, said SK Hynix should seek a market capitalization of 1 quadrillion won and eventually raise that to 2 quadrillion won, according to a book, Super Momentum.
On Monday, it became South Korea's most valuable listed company, with a market value of nearly 2.1 quadrillion won.
