The demand for HBM (High Bandwidth Memory) for artificial intelligence systems continues to put pressure on the memory market. Recently, Samsung has locked in a significant portion of its production capacity until 2031.
The rapid increase in investments in artificial intelligence infrastructure is causing production capacity in the High Bandwidth Memory (HBM) market to be reserved many years in advance. According to a new report from South Korea, Samsung has already secured approximately 70% of its memory production capacity through long-term supply agreements extending until 2031.
Samsung Locks HBM Capacity Until 2031
According to new information, Samsung has entered into agreements with multiple companies, including Microsoft, Nvidia, and Google, filling a large portion of its production capacity until 2031. For those unaware, the increase in HBM production affects not only the supply of this memory type but also the overall DRAM market. HBM modules are created by stacking multiple layers of DRAM.
The increasing number of DRAM layers used, especially in next-generation HBM4 memory, leads to a reduction in the DRAM capacity available for traditional products. Samsung allocating 70% of its capacity indicates a shift in the traditional structure of the memory industry. In the past, memory manufacturers faced cyclical periods of oversupply and scarcity.
Today, however, there is a significant difference between long-term contract prices and spot market prices. According to the report, the spot market price for a 36 GB HBM3E module is approximately 2.87 million South Korean won. For products of the same capacity, the price specified in long-term contracts is stated to be between approximately 500,000 and 700,000 won.
On the HBM4 side, price pressure is even higher. The spot price for an HBM4 module with 16 DRAM layers has reached approximately 4.8 million won. HBM4's use of more DRAM layers increases the memory capacity and bandwidth of AI accelerators while also increasing pressure on DRAM production. This situation could lead to an even more pronounced supply shortage in the DRAM market.
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