[News] Samsung and SK Hynix Urgently Reallocate 20% of DRAM Production Capacity to Support Rising HBM demand

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Thanks to the surge in AI demand, Samsung and SK Hynix, the world’s leading memory chip manufacturers, anticipate the prices of DRAM and high-bandwidth memory (HBM) to remain strong this year due to increasing demand for high-performance chips. According to the Korea Economic Daily, Samsung and SK Hynix have converted over 20% of their DRAM production lines to produce HBM.

Last week, SK Hynix CEO Kwak Noh-jung announced at a press conference that their HBM chips have already been sold out for 2024 and are nearly sold out for 2025.

During an investor relations meeting hosted by Samsung Securities on May 9th and 10^th, a SK Hynix official stated that the company’s HBM chips are supplied through binding annual contracts, which detail supply volumes, payment methods, and deadlines.

The price drop in HBM3 will be offset by the price increase in HBM3e, so the gross profit margin is expected to remain stable in 2024, according to the Korea Economic Daily, citing the SK Hynix official. It is also reported that NVIDIA is the major customer of SK Hynix’s eight-layer HBM3e.

According to the report, a Samsung IR executive also stated that the company’s HBM production has been sold out. Based on the current supply and demand situation, Samsung has predicted that HBM will not be in oversupply in 2025.

Samsung noted that the gap between its eight-layer stacked HBM3e and SK Hynix’s is closing, claiming it has taken the lead with 12-layer HBM3e.

In late March, South Korean media Alphabiz reported that Samsung may exclusively supply 12-layer HBM3e to NVIDIA, indicating NVIDIA is set to commence large-scale purchases of Samsung’s 12-layer HBM3e as early as September.

In terms of the price outlook for traditional DRAM and solid-state drives (SSDs), both SK Hynix and Samsung remain positive.

According to the latest forecast by Trendforce, the HBM market is poised for robust growth, driven by significant pricing premiums and increased capacity needs for AI chips. HBM prices are expected to Increase by 5–10% in 2025.

In terms of market value, HBM is projected to account for more than 20% of the total DRAM market value starting in 2024, potentially exceeding 30% by 2025.

(Photo credit: SK Hynix)