Projections suggest that the shortage of High Bandwidth Memory (HBM), crucial for artificial intelligence (AI) semiconductors, could persist for the next three years.
According to industry reports on Oct. 30, market research firm TrendForce anticipates that HBM demand this year will increase by 58% compared to the previous year and will experience an additional growth of 30% in 2024. The surge in the AI market and the resultant increased demand for AI accelerator chips like Graphics Processing Units (GPUs) required for related server setups contribute to this trend. HBM is a semiconductor chip essential for developing such accelerators.
The current HBM market is witnessing a faster rate of demand growth than supply, resulting in a supply deficit. Gartner predicts that HBM demand will increase eightfold, from 123 million GB in 2022 to 972 million GB by 2027.
According to the industry, CitiGroup Research Center forecasts this year’s HBM supply to demand ratio at -13%, which will grow to -15% next year, with a balance expected by 2027.
Despite SK hynix halving its equipment investments this year, the company continues to invest steadily in HBM. Kim Woo-hyun, vice president of SK hynix, emphasized during a performance announcement conference call on Oct. 26 that “Investment in TSV [Through-Silicon Via] for securing HBM capacity is a top priority,” and that “Although the exact investment size cannot be disclosed, preparations are in place to lead the premium market by adequately addressing the continuously growing market demand.”
Samsung Electronics is also focusing on expanding its capacity to meet HBM demand. In a previous quarterly performance announcement conference call, Samsung mentioned plans to “continuously expand supply capacity to match the rapidly increasing demand for HBM.” The company is working on securing “at least double the current capacity through expansion investments next year” and will “respond further based on future demand changes.”
Micron, the third-largest player in the DRAM industry from the U.S., is also set to ramp up production for next-generation HBM3E by early next year. Sumit Sadana, Micron’s executive vice president, said, “Our goal is to make HBM’s market share comparable to DRAM,” expressing confidence in executing this plan.
Industry insiders predict intense competition among companies in the HBM market due to aggressive expansion strategies.
The mainstreaming of the next-generation HBM3E market next year is also expected to contribute to improvements in the DRAM industry’s performance. According to Gartner, HBM consumption will likely increase by over three times by 2027. Within the industry, it’s estimated that, due to persistent supply shortages, HBM prices could be 7-8 times higher than general-purpose DRAM.
TrendForce indicated, “The growth rate for HBM in 2024 will reach 172%, and since the average unit price of HBM is several times higher than other DRAM products, it can significantly contribute to memory suppliers’ profits.”