Samsung Shifts 30% to HBM: DRAM Shortage Ahead

According to sources from Samsung's supply chain, Samsung has notified that its High Bandwidth Memory (HBM) product, HBM3e, has been certified by NVIDIA and is expected to begin shipping this quarter. In response, Samsung plans to allocate up to 30% of its current DRAM capacity to produce HBM3e to ensure supply to major clients like NVIDIA.

Additionally, Samsung has informed its supply chain partners to prepare for early stocking of standard DRAM products. This move lends credibility to rumors of Samsung significantly shifting DRAM production capacity to HBM. Samsung aims to catch up with SK Hynix, which currently leads the HBM market.

The successful NVIDIA certification signifies Samsung's ability to ramp up supply to NVIDIA, thereby enhancing its market share in the HBM segment and narrowing the gap with SK Hynix. Micron previously noted in its financial reports that producing a given amount of bits in HBM3e consumes approximately three times the wafer supply compared to DDR5 at the same node. Therefore, Samsung's allocation of 30% of its DRAM capacity to HBM production may only increase total HBM production capacity by one-third of this transferred capacity.

While Samsung's reallocation of 30% of its DRAM capacity to HBM production helps alleviate supply tensions in the HBM market, it also significantly reduces supply of standard DRAM products. Given Samsung's dominant position in the global DRAM chip market with over 45% share, this could lead to tight supply and price increases in global standard DRAM products. Analysts from Morgan Stanley report unprecedented supply-demand imbalances in the DRAM market, predicting a "super cycle" with a shortage of standard DRAM surpassing HBM by 23%, likely resulting in price hikes.

TrendForce market research forecasts price increases across various DRAM categories in the third quarter, driven by recovering demand for general servers and growing adoption of HBM in DRAM portfolios. PC DRAM prices are expected to rise by 3-8%, Server DRAM by 8-13%, Mobile DRAM by 3-8%, Graphics DRAM by 3-8%, and Consumer DRAM (DDR3 & DDR4) by 3-8%.

Notably, Samsung is preparing to use 4nm process technology to mass-produce the logic die of its sixth-generation High Bandwidth Memory, HBM4. Positioned at the base of HBM stacks, this logic die is crucial to HBM technology. Samsung currently produces HBM3E logic die using 10nm process technology and aims to establish leadership in HBM technology by transitioning to 4nm technology.