HBM Supply Bit Growth Predicted to Soar at 260%, Dominating 14% of DRAM Market

The memory sector is experiencing significant capital investments in High Bandwidth Memory (HBM) due to its high Average Selling Price and profitability, which is expected to lead to a 260% estimated annual supply bit-growth and account for 20.1% of DRAM industry revenue by 2024.

Significant capital investments in the memory sector driven by high ASP and profitability of HBM
Projected increase in HBM's revenue share within the DRAM industry from 8.4% to 20.1% by the end of 2024
Aggressive production plans by leading companies such as Samsung and SK hynix, indicating a promising future for the industry

According to a recent report by TrendForce, the memory sector is witnessing significant capital investments driven by the high Average Selling Price (ASP) and profitability of High Bandwidth Memory (HBM). Avril Wu, the Senior Vice President at TrendForce, predicts that by the end of 2024, approximately 14% of the total capacity in the DRAM industry will be allocated to producing HBM Through-Silicon Via (TSV), amounting to around 250K/m. This surge in production is expected to result in an estimated annual supply bit-growth of approximately 260%. Furthermore, HBM’s revenue share within the DRAM industry, which stood at 8.4% in 2023, is projected to increase to 20.1% by the end of 2024.

Explaining the production differences between HBM and DDR5, Wu highlights that the die size of HBM is generally 35-45% larger than that of DDR5 with the same process and capacity. For instance, a 24Gb HBM die would be larger than a 24Gb DDR5 die. Additionally, the yield rate for HBM, including TSV packaging, is approximately 20-30% lower than that of DDR5. Moreover, the production cycle for HBM, including TSV, is around 1.5 to 2 months longer than DDR5. As a result, buyers who are eager to secure sufficient supply of HBM will need to place their orders well in advance due to its longer production cycle spanning over two quarters from wafer start to final packaging. It is worth noting that most orders for 2024 have already been submitted to suppliers and are non-cancellable unless there are validation failures.

In terms of HBM production plans, Samsung and SK hynix are leading the pack with their aggressive strategies. By the end of this year, Samsung aims to achieve a total HBM capacity of approximately 130K, including TSV. On the other hand, SK hynix is targeting a capacity of around 120K, although this may vary depending on validation progress and customer orders. Currently, SK hynix dominates over 90% of the market share for mainstream HBM3 products. However, Samsung is expected to catch up closely as it gradually releases AMD’s MI300 over the next few quarters.

These developments in the memory sector, particularly the increasing focus on HBM production, indicate a promising future for the industry. With growing investments and rising order volumes, it is evident that HBM is set to play a significant role in the DRAM market in the coming years.

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Background Information

About AMD:

AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

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About Samsung:

Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

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About SK hynix:

SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

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Technology Explained

DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.