Recently, chip giant SK hynix announced that it will withdraw from the image sensor business of smartphones and digital cameras and focus on artificial intelligence (AI) memory instead. This strategic decision aims to strengthen its competitiveness as the world's leading AI memory supplier and marks a major realignment of SK hynix's business layout.
In an official statement, SK hynix said, "In order to strengthen our position as a global AI company, we have decided to integrate our image sensor business unit into the AI memory business. This move means that SK hynix will focus its resources on building a "full-stack AI memory supplier" and provide a wider range of AI-centric memory products and technologies to the market. The company also said, "With the rise of the AI era, SK hynix has made remarkable achievements in the field of AI memory and is now standing at a critical turning point to become a leader in the AI industry." The decision was made to further consolidate the company's capabilities and enhance its competitiveness in the field of AI memory.”
Looking back at SK hynix's history, in 2008, the company entered the image sensor market, which is a complementary metal-oxide-semiconductor (CIS) image, and launched its own CIS brand, Black Pearl, the following year. CIS is a semiconductor device that converts light into digital images using complementary metal-oxide semiconductor technology, and is widely used in many devices such as smartphones, digital cameras, and security systems. However, in recent years, SK hynix's business has struggled to become profitable due to the declining demand for smartphones and the increasingly fierce competition in the image sensor market.
Figure: SK hynix exited the image sensor business to focus on AI memory
According to market data, in the past few years, global smartphone shipments have declined year by year, which has directly led to the shrinking market demand for image sensors. At the same time, the influx of competitors into the field has intensified the price war in the market, which has severely squeezed SK hynix's profit margins in the image sensor business.
In the current market environment, the AI industry is experiencing explosive growth, and the demand for AI memory is increasing day by day. According to market.us, the global AI memory chip design market size will surge from $11 billion in 2024 to $124.88 billion in 2034, growing at a CAGR of 27.5% from 2025 to 2034. In 2024, the Asia-Pacific region dominated the AI memory chip market with a share of more than 45.4% and revenue of $49.9 billion, of which the Chinese market size was $18.48 billion, and it is expected to grow at a CAGR of 28.1% from 2024 to 2034. As a key support for AI technology, AI memory has special requirements in terms of performance, speed, and power consumption. SK hynix's strategic transformation is keenly aware of this market trend and aims to capture a larger share of the fast-growing AI market by concentrating on the development of the AI memory business.
Industry insiders believe that although there are certain risks in this decision, SK hynix's decision also contains huge opportunities. On the one hand, the abandonment of the image sensor business means that SK hynix will lose market share in this field, and at the same time, it will not be able to fully recoup the initial investment in this business. On the other hand, if SK hynix succeeds in gaining a foothold in the field of AI memory, it is expected to become a dominant player in the AI memory market with its accumulated technology and experience in the semiconductor field, and reap even more lucrative returns.
In the future, SK hynix's development in the field of AI memory deserves continuous attention. Whether it can successfully achieve strategic transformation and stand out in the highly competitive AI market will be a major attraction for the semiconductor industry.
