[News] HBM Boom May Lead to DRAM Shortages in the Second Half of the Year

Memory giants Samsung, SK Hynix, and Micron are all actively investing in high-bandwidth memory (HBM) production. Industry sources cited in a report from Commercial Times indicate that due to capacity crowding effects, DRAM products may face shortages in the second half of the year.

According to TrendForce, the three largest DRAM suppliers are increasing wafer input for advanced processes. Following a rise in memory contract prices, companies have boosted their capital investments, with capacity expansion focusing on the second half of this year. It is expected that wafer input for 1alpha nm and above processes will account for approximately 40% of total DRAM wafer input by the end of the year.

HBM production will be prioritized due to its profitability and increasing demand. Regarding the latest developments in HBM, TrendForce indicates that HBM3e will become the market mainstream this year, with shipments concentrated in the second half of the year.

Currently, SK Hynix remains the primary supplier, along with Micron, both utilizing 1beta nm processes and already shipping to NVIDIA. Samsung, using a 1alpha nm process, is expected to complete qualification in the second quarter and begin deliveries mid-year.

The growing content per unit in PCs, servers, and smartphones is driving up the consumption of advanced process capacity each quarter. Servers, in particular, are seeing the highest capacity increase—primarily driven by AI servers with content of 1.75 TB per unit. With the mass production of new platforms like Intel’s Sapphire Rapids and AMD’s Genoa, which require DDR5 memory, DDR5 penetration is expected to exceed 50% by the end of the year.

As HBM3e shipments are expected to be concentrated in the second half of the year—coinciding with the peak season for memory demand—market demand for DDR5 and LPDDR5(X) is also expected to increase. With a higher proportion of wafer input allocated to HBM production, the output of advanced processes will be limited. Consequently, capacity allocation in the second half of the year will be crucial in determining whether supply can meet demand.

Samsung expects existing facilities to be fully utilized by the end of 2024. The new P4L plant is slated for completion in 2025, and the Line 15 facility will undergo a process transition from 1Y nm to 1beta nm and above.

The capacity of SK Hynix’s M16 plant is expected to expand next year, while the M15X plant is also planned for completion in 2025, with mass production starting at the end of next year.

Micron’s facility in Taiwan will return to full capacity next year, with future expansions focused on the US. The Boise facility is expected to be completed in 2025, with equipment installations following and mass production planned for 2026.

With the expected volume production of NVIDIA’s GB200 in 2025, featuring HBM3e with 192/384GB specifications, HBM output is anticipated to nearly double. Each major manufacturer will invest in HBM4 development, prioritizing HBM in their capacity planning. Consequently, due to capacity crowding effects, there may be shortages in DRAM supply.

Read more

• HBM3e Production Surge Expected to Make Up 35% of Advanced Process Wafer Input by End of 2024, Says TrendForce
• [News] DRAM Price Surge Halts, Could HBM Demand Drive Price Increases?

(Photo credit: Samsung)