High Bandwidth Memory: Redefining the Semiconductor Ecosystem
As artificial intelligence (AI) and high-performance computing (HPC) redefine our technological landscape, a fierce rivalry brews among the memory titans—Samsung, SK hynix, and Micron—competing for dominance in the burgeoning High Bandwidth Memory (HBM) market. The story of HBM is one of both innovation and intrigue, where cutting-edge technology meets relentless demand, and market leaders battle to supply the silicon lifeblood that powers AI-driven breakthroughs.
SK hynix, the reigning champion of HBM, supplies Nvidia’s AI juggernauts, which have become synonymous with computing performance and technological ambition. Samsung, the manufacturing powerhouse, fights to hold its ground against Micron’s rapid ascent and SK hynix’s unyielding grip on the premium market. Meanwhile, CXMT, a relative newcomer, is beginning to challenge these giants, vying for a share of the cost-conscious segments.
The stakes are monumental. With the HBM market valued at $5 billion in 2023 and projected to approach $30 billion by 2027, the decisions made today will shape not only the competitive landscape but the very infrastructure underpinning AI and HPC progress. This tale of technological triumph and market upheaval, supported by data on unit shipments, revenues, and ASP trends, provides a vivid window into the silicon wars that define our era.
A decline in semiconductor sales and profits has been largely driven by challenging conditions in the IT market. While demand for artificial intelligence (AI) applications and server memory remains robust, the recovery in smartphone and PC markets has been sluggish. This downturn has significantly impacted the general-purpose DRAM segment. Additionally, an oversupply of general memory products from China has intensified price pressures, compounding the industry's challenges.
In this article I present forecasts for HBM by revenue, units, and ASPs. I discuss the capacity trends for 1b nm DRAM for the memory companies, and I present charts showing DRAM and NAND by bit shipments, revenues, and ASP for the three major memory companies from 1Q 2016 to 3Q 2024. All these data are included in The Information Network’s report entitled Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts.
HBM as the Catalyst for Vertical Integration
High Bandwidth Memory is not just a technological breakthrough; it is reshaping the dynamics of the semiconductor industry itself. Unlike traditional DRAM or NAND, which rely on standardized production and limited interaction with customers, HBM requires intense collaboration between memory suppliers and their customers. Each HBM stack must be meticulously optimized for specific processor architectures, creating an unprecedented level of partnership between memory makers and logic designers.
SK hynix’s leadership in HBM, for instance, stems not only from its technical innovation but also from its deep integration with Nvidia, the leading AI processor manufacturer. Samsung and Micron are following suit, working closely with customers to ensure their HBM products meet the exacting demands of AI and HPC workloads. This shift transforms memory companies from simple suppliers into co-designers, sharing in the responsibility for end-product performance.
This trend toward vertical integration is disrupting traditional supply chain relationships, with memory manufacturers gaining influence over processor design and chip performance. It also opens the door to new business models, such as proprietary HBM stacks tailored to specific processor platforms or licensing agreements for HBM-specific intellectual property. Companies with the strongest integration capabilities, such as SK hynix, could emerge not just as memory leaders but as strategic partners driving innovation across the semiconductor ecosystem.
HBM Market Dynamics: Samsung, SK hynix, and Micron
Samsung’s presence in the HBM market reflects both its strengths as a manufacturing giant and the challenges it faces in an increasingly competitive landscape. In Q3 2024, HBM accounted for approximately 18% of Samsung’s DRAM revenue, with expectations to reach 30% by the end of Q4. The company has successfully ramped production of its 8-Hi HBM3E but is facing delays in the qualification of its 12-Hi version, which Nvidia is expected to validate in the first half of 2025. Samsung’s HBM4, slated for production in the second half of 2025, signals its commitment to next-generation technologies. However, its broader focus on legacy DRAM products and diversified customer base limits its ability to command the premium ASPs achieved by SK hynix.
SK hynix has cemented itself as the dominant force in the HBM market, leveraging its strong technological leadership and deep customer relationships. In Q3 2024, HBM contributed 30% of the company’s DRAM revenue, a figure set to rise to 40% by Q4. SK hynix is preparing for the mass production of 12-Hi and 16-Hi HBM4 in late 2025, with consistent focus on yield optimization through technologies like MR-MUF bonding and the 1b node. Historically reliant on Nvidia for the bulk of its HBM revenue, SK hynix is diversifying its customer mix, with non-Nvidia clients expected to account for a growing share by 2025.
Micron’s late entry into the HBM market has not stopped it from becoming a formidable competitor. The company exceeded its FY24 target of “several hundred million dollars” in HBM revenue and is on track to achieve $3.5 billion by 2025. Aggressive scaling of HBM3E and the planned ramp of HBM4 have positioned Micron as a rising challenger to SK hynix and Samsung. The company projects the total addressable market for HBM to exceed $25 billion by 2025, supported by increasing adoption in AI and HPC applications.
HBM Market Tables
Tables 1-3 present HBM Unit Shipment, HBM Revenue, and HBM Average Selling Price forecasts from 2023-2027. These can be viewed by Paid Subscribers behind the Paywall.