Q4 2024 DRAM: HBM Prices Climb, Rest of Market Stable

The price of general DRAM will stagnate.

Recently, TrendForce predicted that the price of high-bandwidth memory (HBM) in the DRAM market will rise in the fourth quarter of 2024, while general DRAM prices will remain stagnant. Due to weak demand for general products and delays in entering the HBM market, Samsung Electronics’ third-quarter profits have taken a hit. Many experts suggest that the South Korean semiconductor giant must prioritize supplying HBM to AI chip leader NVIDIA in order to recover from the downturn.

The price of general DRAM is expected to increase by 0%-5% in the fourth quarter compared to the previous quarter. However, as HBM’s share in the DRAM market grows, the average price for all DRAM, including HBM, is forecast to increase by 8%-13% over the previous quarter.

General DRAM prices increased by 8%-13% in the third quarter but are expected to stall in the fourth quarter due to a decline in consumer demand from the economic downturn and an increase in supply from Chinese memory manufacturers. While memory manufacturers are expanding HBM production, leading to a reduction in general DRAM supply, this will not be enough to offset weak demand.

This situation is challenging for Samsung Electronics, which has yet to begin supplying fifth-generation HBM (HBM3E) to NVIDIA. Samsung’s preliminary operating profit for the third quarter of 2024 was 9.1 trillion KRW, falling short of market expectations and down 12.8% from 10.44 trillion KRW in the previous quarter.

The primary reason cited is poor performance in Samsung’s Device Solutions (DS) division, which oversees semiconductor operations. Samsung explained, “While demand for server/HBM memory remained strong, the DS division’s performance declined quarter-over-quarter due to inventory adjustments by some mobile chip customers, increased supply of traditional products from Chinese memory manufacturers, one-time expenses, and currency exchange effects.”

TrendForce expects contract prices to drop by 5%-10% in the fourth quarter. Prices for LPDDR5X DRAM, an advanced product and seventh-generation chip, are expected to remain stable due to balanced inventory levels.

One critical factor is that Samsung has not yet started supplying its largest enterprise client, NVIDIA, with 8-layer HBM3E memory.

Samsung’s competitor, SK Hynix, began mass production of 12-layer HBM3E in September and will start supplying NVIDIA in the first quarter of next year. HBM significantly enhances data processing speed through stacked DRAM layers. Although complex and costly to manufacture, demand for HBM has surged due to the AI industry’s rapid growth.

As the leader in the HBM market, SK Hynix achieved an operating profit of 5.4685 trillion KRW with a 33% margin in the second quarter of 2024. Its operating profit rose to 6.764 trillion KRW in the third quarter, a 23.7% increase from the previous quarter. Meanwhile, Micron, another supplier of HBM to NVIDIA, exceeded market expectations with $7.75 billion in revenue for the fourth quarter of its 2024 fiscal year, marking a 17% quarterly increase.

TrendForce forecasts that HBM’s share of total DRAM revenue will grow from 8% in 2023 to 21% in 2024 and surpass 30% by 2025. Specifically, HBM3E chips are expected to account for 80% of HBM bit demand, with 12-layer products representing half of this demand.

According to TrendForce’s senior research vice president, Wu Yating, it remains uncertain if manufacturers will be able to switch to HBM3e in mass production as planned next year. The long learning curve for producing 12-layer HBM3e makes it challenging to determine if there will be excess capacity.

The market also anticipates a potential oversupply and price decline by 2025, as some DRAM suppliers actively expand Through-Silicon Via (TSV) capacity. Samsung’s TSV capacity is expected to increase by over 40%, from 120K per month at the end of 2024 to 170K per month by the end of 2025. SK Hynix’s monthly capacity is projected to increase by 25% over the same period. However, it remains uncertain if the planned expansions will proceed smoothly, as the products have yet to complete full validation.

Wu Yating also noted that past HBM3 and HBM3e production timelines suggest an eight-layer product requires at least two quarters of production to stabilize yield rates. As market demand rapidly shifts toward 12-layer HBM3e, the learning curve is unlikely to shorten significantly. Moreover, the NVIDIA B200, GB200, and AMD MI325, MI350 will all adopt 12-layer HBM3e. Due to high device costs, these systems have stricter requirements for HBM stability, adding a variable to the mass production of 12-layer HBM3e.

TrendForce predicts that, driven by AI platforms adopting next-generation HBM products, more than 80% of HBM bit demand in 2025 will be for HBM3e, with 12-layer products comprising over half. These are likely to become the mainstream competitive products among major AI players in the second half of next year, followed by eight-layer HBM. Thus, even if an oversupply arises, it will most likely affect older generations such as HBM2e and HBM3, with the impact on each DRAM supplier depending on their product mix.

Source: TrendForce

Related:

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4. Discover Samsung 2025 Roadmap for Memory Advancements
5. HBM Sales Skyrocket 330% in Semiconductor Leaders Report
6. ASIC HBM to See 100% Growth in 3 Years Amid Storage Crisis
7. Micron Begins HBM Memory Packaging Factory in Singapore
8. Next-Gen Samsung HBM May Adopt Fluxless Technology

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