NPE sues SK Hynix: alleges Dell, Microsoft and Nvidia also “indirectly” infringing semiconductor patents

Context: The global semiconductor industry is growing exponentially, with the latest figures showing worldwide sales hit US$57.8 billion in November 2024 – a 20.7% year-on-year increase (January 7, 2025 Semiconductor Industry Association press release). But everyone wants to have, and keep, a slice of the market, triggering a wave of semiconductor patent infringement disputes across the globe.

What’s new: South Korea’s SK Hynix has become the latest in this wave of semiconductor-related patent infringement disputes. Non-practising entity Advanced Memory Technologies LLC (AMT) sued the memory chip supplier in the United States District Court for the Eastern District of Texas, alleging that the company has infringed four patents related to semiconductor memory modules.

Direct impact and wider ramifications: The U.S. is one of SK Hynix’s most lucrative markets, with the complaint stating that its Texas-based subsidiary earned US$12 billion in revenue in the first six months of 2024 – accounting for more than half of its overall sales during that time. AMT has demanded a trial by jury and has also named three major tech companies in the complaint, Dell, Microsoft and Nvidia, alleging that they “directly or indirectly make, import, ship, distribute, offer for sale, sell, and advertise products incorporating SK Hynix’s infringing memory modules in the U.S.”.

AMT is a Texas-based non-practising entity that has so far not launched any patent infringement lawsuits (not publicly anyway). 

Based in Icheon, defendant SK Hynix manufactures and sells semiconductor devices such as NAND flash memory and DRAM modules. It is partly owned by SK Group and partly by Hyundai Group, two of the country’s “Big Four” – Samsung, Hyundai Motor, SK and LG – which collectively own some of the largest patent portfolios in the world. SK Hynix is also one of the largest semiconductor sellers in the world and manages a portfolio of over 1,200 patents.

The patents-in-suit are:

US Patent No. 7,777,557 (“Booster circuit”)
US Patent No. 7,920,018 (“Booster circuit”)
US Patent No. 7,969,231 (“Internal voltage generating circuit”)
US Patent No. 8,593,888 (“Semiconductor memory device”)

AMT claims that SK Hynix has derived and continues to derive substantial revenue from its infringing acts, including through its subsidiaries and customers. The U.S. accounted for 64% of SK Hynix’s sales in Q3 2024, according to the complaint. In the first six months of 2024 alone, its U.S. business brought in US$12 billion in revenue – accounting for more than half of its overall sales during that time.

The NPE alleges that SK Hynix also provides support for users and customers of its infringing semiconductor products in the U.S., as well as active promotion for such products at major events like HPE Discover 2024 and the Dell Technologies Forum 2024.

Tech giants Dell, NVIDIA, Microsoft, and Advanced Micro Devices, Inc. (AMD) are some of SK Hynix’s biggest customers in the U.S. and AMT also notes that they “directly or indirectly” make and sell products containing SK Hynix’s infringing memory modules in the U.S. Nvidia, for example, uses SK Hynix’s high-bandwidth DRAM chips in its AI processors and Grace CPU Superchip, while Microsoft uses SK Hynix’s memory modules in products such as Xbox Series X/S gaming consoles, the complaint reads.