HBM3e Production Set to Skyrocket, Dominating Advanced Process Wafer Input by 2024

According to a report from TrendForce, the three largest suppliers of DRAM are ramping up their wafer input for advanced processes. This move comes in response to an increase in memory contract prices, prompting companies to invest more capital into capacity expansion, particularly in the second half of this year. TrendForce predicts that by the end of the year, wafer input for 1alpha nm and above processes will make up around 40% of the total DRAM wafer input.

The production of High Bandwidth Memory (HBM) is being prioritized due to its profitability and growing demand. However, the limited yields of HBM, which currently stand at around 50-60%, and the fact that its wafer area is 60% larger than that of DRAM products, means that a higher proportion of wafer input is required. Based on the TSV (Through-Silicon Via) capacity of each company, it is expected that HBM will account for 35% of advanced process wafer input by the end of this year, while the remaining wafer capacity will be used for LPDDR5(X) and DDR5 products.

In terms of HBM developments, TrendForce suggests that HBM3E will become the market mainstream this year, with shipments concentrated in the second half of the year. Currently, SK hynix is the primary supplier, along with Micron, both utilizing 1beta nm processes and already shipping to nVidia. Samsung, on the other hand, is using a 1alpha nm process and is expected to complete qualification in the second quarter, with deliveries starting in the middle of the year.

The increasing demand for DDR5 and LPDDR5(X) is also contributing to the consumption of advanced process capacity. PCs, servers, and smartphones are experiencing a rise in content per unit, driving up the need for more advanced process capacity each quarter. Servers, in particular, are witnessing the highest capacity increase, mainly due to AI servers with a content of 1.75 TB per unit. With the mass production of platforms like Intel’s Sapphire Rapids and AMD’s Genoa, which require DDR5 memory, DDR5 penetration is expected to surpass 50% by the end of the year.

While HBM3e shipments are anticipated to be concentrated in the second half of the year, coinciding with the peak season for memory demand, the market demand for DDR5 and LPDDR5(X) is also expected to rise. However, manufacturers are being cautious with their capacity expansion plans due to financial losses experienced in 2023. With a higher proportion of wafer input allocated to HBM production, the output of advanced processes will be limited. Therefore, the allocation of capacity in the second half of the year will play a crucial role in determining whether supply can meet demand.

There is a potential risk of a DRAM supply shortage due to the prioritization of HBM capacity. If there isn’t sufficient expansion of advanced process capacities, the increased focus on HBM production could lead to a shortage in DRAM supply. Samsung’s existing facilities are expected to be fully utilized by the end of 2024, with new plants scheduled for completion in 2025. SK hynix’s M16 plant is set to expand next year, and the M15X plant is 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, followed by equipment installations and mass production in 2026.

However, the exact timelines for mass production at these new factories are still uncertain and depend on the profitability of 2024. The manufacturers’ commitment to maintaining memory price increases this year is reinforced by their reliance on future profits to fund further equipment purchases. Additionally, NVIDIA’s GB200, which is set to ramp up production in 2025, will feature HBM3e 192/384 GB, potentially doubling HBM output. With the development of HBM4 on the horizon, the prioritization of HBM without significant investment in expanding capacity could result in insufficient DRAM supply due to capacity constraints.

Background Information

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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 Intel:

Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

  

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About nVidia:

NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

  

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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

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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.

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HBM3E: HBM3E is the latest generation of high-bandwidth memory (HBM), a type of DRAM that is designed for artificial intelligence (AI) applications. HBM3E offers faster data transfer rates, higher density, and lower power consumption than previous HBM versions. HBM3E is developed by SK Hynix, a South Korean chipmaker, and is expected to enter mass production in 2024. HBM3E can achieve a speed of 1.15 TB/s and a capacity of 64 GB per stack. HBM3E is suitable for AI systems that require large amounts of data processing, such as deep learning, machine learning, and computer vision.

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LPDDR5: LPDDR5 is a type of computer memory technology that is used in many modern computers. It stands for Low Power Double Data Rate 5 and is the latest version of the LPDDR memory standard. It is a type of dynamic random access memory (DRAM) that is designed to be more power efficient than its predecessors. It is used in many modern laptops, tablets, and smartphones to provide faster performance and longer battery life. LPDDR5 is also used in some high-end gaming PCs and workstations to provide faster loading times and smoother gaming experiences. It is also used in some servers and data centers to provide faster data processing and storage.

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