Samsung & SK Hynix Cease DDR3 Supply

Reports from industry insiders indicate that two prominent global suppliers of DRAM, namely Samsung and SK Hynix, are intensifying their efforts towards the production of high-bandwidth memory (HBM) and mainstream DDR5 memory modules. Beginning in the latter half of this year, they are poised to discontinue the supply of DDR3 niche-type DRAM, triggering a surge in market demand and consequent price spikes in DDR3 modules, reaching up to a notable 20% increase. Projections suggest that DDR3 prices will continue to escalate in the coming months.

This surge in demand is primarily fueled by the burgeoning opportunities in artificial intelligence (AI), driving substantial growth in shipments for leading AI chip manufacturers such as NVIDIA and AMD. These companies are actively seeking high-bandwidth memory essential for AI chipsets. Presently, only three major international memory manufacturers—SK Hynix, Micron, and Samsung—can meet the demand for high-bandwidth memory. Due to the urgent and robust demand, these key players have already committed their entire high-bandwidth memory production capacity for this year, with next year's capacity already pre-allocated.

Moreover, major PC platform manufacturers like Intel and AMD are preparing to unveil new processors in the latter part of the year, fully compatible with DDR5 memory. As international memory chip manufacturers prioritize the expansion of their high-bandwidth memory production capacity and aim for a share in the DDR5 market, the mature DDR3 market is gradually being phased out. Consequently, manufacturers are gradually discontinuing DDR3 production to focus on DDR5 and high-bandwidth memory modules, which offer better unit prices and profit margins.

In line with their strategic focus on high-bandwidth memory and DDR5 development, Samsung has formally notified its clients of the impending cessation of DDR3 production by the end of the second quarter. Similarly, SK Hynix had transitioned its Wuxi, China facility from DDR3 to DDR4 production by the close of last year, effectively halting DDR3 supply. Micron, with a goal to expand DDR5 and high-bandwidth memory production capacity, has significantly reduced its DDR3 supply.

Additionally, Nanya Technology, Taiwan's leading DRAM chip manufacturer, has redirected a substantial portion of its production capacity towards DDR4 and DDR5 memory modules, with DDR3 now solely accepting customer foundry orders.