Report: Samsung and SK Hynix will convert over 20% of their DRAM production lines to HBM production lines

According to the South Korean daily newspaper, the two global memory chip manufacturers, Samsung Electronics and SK Hynix, predict that due to the increasing demand for high-performance chips in artificial intelligence applications, the prices of DRAM and High Bandwidth Memory (HBM) will remain strong in 2024.

To meet market demand, they have converted over 20% of their DRAM production lines to HBM production lines. This move will result in a decrease in DRAM production while increasing the capacity of HBM chips.

On May 9th and 10th, at an investor relations conference hosted by Samsung Securities, SK Hynix CEO Kwak Noh-jung revealed that HBM chip orders for this year and 2025 are almost sold out, indicating high demand for HBM chips. An SK Hynix official stated that the company has signed binding HBM chip supply contracts with customers to ensure stable supply volume and profit margins.

It is reported that the majority of the orders for the eight-layer HBM3E chips come from the main customer Nvidia. Despite the price drop of HBM3, the price increase of HBM3E will offset this impact, potentially maintaining profit margins. Samsung Electronics officials stated that their HBM output has been sold out, and there will be no oversupply of HBM in 2025.

Furthermore, Samsung plans to start production of 12-layer HBM3E chips in the second quarter, showcasing its leading position in the HBM3E market. In the future, Samsung will develop the sixth generation HBM (HBM4) and start mass production in 2026, using hybrid bonding technology to connect the top and bottom of DRAM.

Internal sources at Samsung indicated that DRAM prices will not drop in the short term, and the growth in demand for SSDs is also a long-term trend