The semiconductor industry sees a new opportunity for explosive growth as storage chip manufacturers make heavy investments.

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Since the release of ChatGPT, artificial intelligence AI has rapidly swept across the globe, sparking a new wave of technological revolution. Concurrently, fueled by the booming demand in the HBM market, semiconductor memory chip manufacturers such as SK Hynix, Samsung, Micron, and others have seized the opportunity to pivot their strategies, initiating a new round of market competition.

Riding the AI wave,HBM Dominates Over DRAM

Driven by shipments of AI servers, the proportion of HBM to DRAM is rapidly increasing. Benefiting from HBM's significantly higher unit price compared to traditional DDR5, approximately five times higher, coupled with the expansion of single-unit HBM capacities in AI chip-related products, HBM's share of both DRAM production capacity and production value is projected to rise significantly from 2023 to 2025.

According to previous data from Jibang Consulting, HBM accounted for 2% and 5% of total DRAM production capacity in 2023 and 2024 respectively. By 2025, it is estimated that this share will exceed 10%. In terms of production value, starting from 2024, HBM is expected to contribute over 20% to the total DRAM production value, with a potential increase to over 30% by 2025.

Original factory production capacity has been locked in ahead of schedule. Next year, preliminary adjustments indicate a 5-10% increase in HBM prices.

Due to the increased share of HBM in DRAM and the recovery in demand from general-purpose servers, suppliers are continuing to raise prices. Manufacturers began negotiating prices for HBM for 2025 in the second quarter of this year. However, constrained by limited overall DRAM production capacity and to prevent capacity squeeze effects, suppliers have preliminarily increased prices by 5-10%, including for HBM2e, HBM3, and HBM3e.

Driven by robust market demand, major manufacturers have already filled their 2024 HBM production capacities ahead of schedule. Recently, Micron also stated that memory chip supply cannot meet demand, with its HBM memory chips for 2024-2025 already sold out. In fact, not only Micron but also SK Hynix and other manufacturers have nearly filled their 2025 orders. According to recent disclosures from the storage chip supply chain, visibility for upstream original HBM orders extends into the first quarter of 2026.

As of 2022, SK Hynix dominates the HBM market share with 50%, followed by Samsung with approximately 40%, and Micron with 10%. To address the vast opportunities presented by AI artificial intelligence, SK Hynix, Micron, and Samsung are all aggressively increasing HBM production capacities through increased investments and construction of new facilities.

For instance, Micron has announced multiple factory construction plans to expand HBM production capacities and aims to more than double its market share to around 20% by 2025. As for Samsung, Hwang Sang-joong, Vice President and Head of DRAM Products and Technology, stated in March this year that HBM production is expected to increase to 2.9 times that of last year, and HBM shipments in 2026 will be 13.8 times that of 2023. By 2028, Samsung plans to further increase annual HBM production to 23.1 times that of 2023.

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