Samsung Electronics, SK Hynix, and Micron are projected to see HBM4 memory prices double next year, according to multiple industry sources cited by Taiwan's DigiTimes. The forecast indicates HBM4 pricing will rise from approximately $2 per gigabit (Gb) in the second half of this year to $4-5 per Gb or higher next year, with current HBM3E prices at $1.5-1.6 per Gb also expected to increase. The three global memory manufacturers are anticipated to finalize next year's HBM supply pricing around the fourth quarter of this year. The price surge is attributed to surging demand ahead of NVIDIA's next-generation AI platform Verarubin launch in the second half, combined with production bottlenecks and expanding long-term supply agreements (LTA). HBM manufacturing consumes approximately three times the wafer production capacity of standard DDR5 DRAM, with HBM4's total production cycle spanning 4-6 months compared to DDR5's 3-3.5 months, intensifying supply constraints in the AI infrastructure buildout.
HBM4 Production Bottlenecks Drive Supply Constraints
HBM manufacturing requires approximately three times the wafer production capacity of standard DDR5 DRAM, according to industry experts cited by DigiTimes. HBM4's total production cycle spans 4-6 months, up to double the 3-3.5 months required for DDR5, with lower initial yields further pressuring pricing. Industry analysts attribute the significant price increases to these production constraints coinciding with expanded demand for NVIDIA's Verarubin platform scheduled for second-half release.
Long-Term Contracts Lock Up Memory Capacity
Major AI customers are securing 3-5 year long-term agreements (LTA) and strategic customer agreements (SCA) with memory manufacturers, locking up an estimated 20-30% of general DRAM production capacity, according to industry projections cited in the report. With HBM occupying approximately 30% of total DRAM capacity, the analysis indicates that roughly half of total production capacity could be pre-allocated to major customers starting next year. Suppliers are securing "post-settlement" clauses in long-term contracts that allow additional payments if market prices rise above the initially fixed contract price, according to the sources.
DDR5 Profitability Influences HBM Pricing Strategy
DDR5 profit margins for some suppliers exceeded 80% this year and continue rising each quarter, according to the DigiTimes report. Increasing numbers of customers are selecting DDR5 as an alternative to expensive and scarce HBM, driving demand for the standard memory type. DDR5's shorter production cycle and easier process conversion compared to HBM4 provide higher short-term profitability. Samsung Electronics and SK Hynix are reallocating some production capacity back to DDR5 in response. DigiTimes analysis indicates that if DDR profitability remains elevated, suppliers will likely demand additional HBM price increases to justify converting general DRAM production lines to HBM manufacturing.
AI Infrastructure Demand Outlook Remains Strong
Recent reports of Meta pursuing external leasing of AI computing resources raised concerns about demand weakening, but industry consensus dismisses this interpretation as exaggerated, according to the sources. AI infrastructure remains in supply shortage with no clear signs of slowdown through 2027. Major cloud service providers are preparing aggressive capital expenditures for next year, with sustained demand growth projected for HBM, DDR, server memory modules (RDIMM), and enterprise solid-state drives (eSSD). DigiTimes notes that customers without long-term contracts face the greatest supply risks, with consumer electronics manufacturers and small-to-medium customers expected to encounter increasing difficulties securing volume.
FAQ
What is the projected HBM4 price increase for next year?
HBM4 prices are projected to rise from approximately $2 per gigabit (Gb) in the second half of this year to $4-5 per Gb or higher next year, according to multiple industry sources cited by Taiwan's DigiTimes. Current HBM3E prices at $1.5-1.6 per Gb are also expected to increase. Samsung Electronics, SK Hynix, and Micron are anticipated to finalize next year's HBM supply pricing around the fourth quarter of this year.
Why are HBM4 prices expected to double?
The price surge is attributed to surging demand ahead of NVIDIA's Verarubin platform launch in the second half, combined with production bottlenecks and expanding long-term supply agreements. HBM manufacturing consumes approximately three times the wafer production capacity of standard DDR5 DRAM, with HBM4's production cycle spanning 4-6 months compared to DDR5's 3-3.5 months. Long-term agreements are locking up an estimated 20-30% of general DRAM capacity, with HBM occupying approximately 30% of total DRAM capacity.
How are long-term contracts affecting memory supply?
Major AI customers are securing 3-5 year long-term agreements (LTA) and strategic customer agreements (SCA) with Samsung Electronics, SK Hynix, and Micron, pre-allocating an estimated 20-30% of general DRAM production capacity. Industry analysis indicates that roughly half of total production capacity could be pre-allocated to major customers starting next year. Suppliers are securing "post-settlement" clauses allowing additional payments if market prices rise above initially fixed contract prices, according to sources cited by DigiTimes.
