Hunger for more HBM capacity could cause shortage DRAM-a

Analyst warns of another unfortunate side effect of AI

Industry preference for high bandwidth memory (HBM) has the potential to cause a DRAM supply shortage unless more manufacturing lines are built quickly, TrendForce is warning.

The market analyst has increasingly sounded the alarm about the "potential crowding out effects on HBM capacity" as demand for the memory is expected to grow 200 percent this year. As if that weren't enough, demand is expected to double again in 2025.

The three largest DRAM suppliers have woken up to the necessity of expanding capacity for advanced nodes.

TrendForce this week noted that Samsung, Micron, and SK hynix all were in the midst of either building new or transitioning old factories.

Samsung's P4L plant is slated for completion in 2025 while transitioning its Line 15 facility from 1Y nm to 1beta nm and above. SK hynix M16 expansion will happen in 2025, the same year its M15X plant is pegged to start mass production. The M15X was intended originally to make NAND memory chips before that was changed to HBM/DRAM.

Micron's Taiwan facility will return to full capacity in 2025 with future expansions focused on the US. Micron's Boise facility is expected to be completed in 2025 and mass production planned for 2026.

TrendForce detailed that the exact timelines for the new factories will depend on 2024 profits. The companies will need to make some cash in order to afford the latest and greatest equipment, thus incentivizing increased pricing on stock this year.

SK hynix has already detailed that its capex this year will be higher than initially planned thanks to the shift towards HBM and M15X.

"HBM production will be prioritized due to its profitability and increasing demand," TrendForce said. After HBM, whatever manufacturing capacity is left will go to LPDDR5(X) and DDR5 products.

And that demand comes from the surge in AI. Samsung cited in its Q1 2024 financial results "the continuous increase in the supply of AI servers and subsequent expansion of associated cloud services" for both HBM and conventional server and storage memory surges, which flipped its profits positive after a year of lows.

TrendForce reckons that trend will continue for DDR5 and LPDDR5(X). DDR5 is expected to exceed 50 percent by the end of the year on the back of new platforms like Intel's Sapphire Rapids and AMD's Genoa.

Yet HBM3e will become the market mainstream this year as memory makers ship the bulk of it in the second half of 2024. TrendForce predicts HBMs will make up 35 percent of advanced process wafer input by the end of 2024.

HBM3e will get a further boost from Nvidia, whose GB200s set for production in 2025 are specced for it. ®

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