HBM memories of different generations are actively used by computing accelerators for artificial intelligence systems, and SK Hynix remains the only supplier for the needs of NVIDIA, which dominates the market for these accelerators. It’s no surprise that SK hynix’s DRAM market share reached a record 35% in the third quarter.
The Omdia resource shared the results of statistical research Business Korea. According to experts, the DRAM memory chip industry has become one of the main beneficiaries of the growing demand for artificial intelligence systems. If the DRAM market as a whole grows by an average of 21% annually until 2027, according to Omdia analysts, then the HBM segment separately will grow by 52% annually. By the end of this year, HBM’s share of the DRAM market will exceed 10%, and in 2027 it is expected to approach 20%.
In the short term, demand for HBM will exceed supply. Next year, the main HBM manufacturers will double the production volume of such memories, but they already have orders for the coming year and it will be difficult to fulfill them on time even after doubling the production volume. HBM-type memory is five to seven times more expensive than classic DRAM types and consumers are willing to replace it with a new one more often, on average every one to two years. All of this guarantees HBM manufacturers stable sales growth in the foreseeable future. In the third quarter, SK hynix’s DRAM market share reached its highest ever share of 35%.
According to Omdia experts, in order to meet the demand for HBM, memory manufacturers sometimes even have to abandon plans to expand production of other types of DRAM. They are also convinced that the technological complexity of HBM will limit the number of market participants and only a few companies will be able to share the relatively high profits resulting from the implementation of HBM storage. Only companies with a well-developed production infrastructure and quality control will be able to maintain their position in this market segment.