The industry has reported that the world’s top two DRAM suppliers, South Korea’s Samsung and SK Hynix, are fully focused on pushing HBM and mainstream DDR5 specification memory. Starting from the second half of the year, they will cease supplying DDR3 niche DRAM, triggering a buying frenzy in the market and causing recent DDR3 prices to soar by up to 20%, with further price increases expected in the second half of the year.
Analysts are optimistic that with the two major memory giants exiting the DDR3 market, it will benefit Taiwanese memory manufacturers such as Winbond, Etron, and AP Memory, who primarily focus on DDR3. These related Taiwanese manufacturers are expected to gain from this shift in orders and the associated price hikes, driving a swift recovery in their performance.
Industry insiders analyze that the ongoing AI boom is leading to a significant increase in shipments from AI chip giants such as NVIDIA and AMD, which are frantically snapping up the essential HBM for AI chips. Currently, only SK Hynix, Micron, and Samsung can supply HBM. Due to the urgent and strong demand, the three major memory manufacturers have not only fully booked their HBM production capacity for this year, but next year’s capacity has also been sold out.
As HBM becomes the market’s hot commodity, “there are always buyers willing to bid for any available supply,” allowing SK Hynix, Micron, and Samsung to reap substantial profits. This year, they are all focused on expanding HBM production capacity.
Furthermore, with major PC platform manufacturers like Intel and AMD set to launch new processors in the second half of the year that will fully support DDR5 specification DRAM, the three international giants are expanding HBM production capacity while also striving to penetrate the DDR5 market. Consequently, they have no time to maintain the relatively mature DDR3 market, leading to a gradual exit from DDR3 production to free up equipment and capacity for the more profitable DDR5 and HBM production.
It is reported that in response to the strategy of developing HBM and DDR5, Samsung has already notified customers that it will stop DDR3 production by the end of the second quarter. As for SK Hynix, it had already transitioned its Wuxi plant’s DDR3 process to DDR4 at the end of last year, effectively ceasing DDR3 supply. Micron, in its efforts to expand DDR5 and HBM production capacity, has also significantly reduced its DDR3 supply.
Additionally, Taiwan’s largest DRAM chip manufacturer, Nanya Technology, is also significantly shifting its production capacity towards DDR4 and DDR5, with DDR3 only accepting customer contract manufacturing orders.
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