Avril Wu, TrendForce Senior Research Vice President, reports that the HBM market is poised for robust growth, driven by significant pricing premiums and increased capacity needs for AI chips. HBM's unit sales price is several times higher than that of conventional DRAM and about five times that of DDR5. This pricing, combined with product iterations in AI chip technology that increase single-device HBM capacity, is expected to dramatically raise HBM’s share in both the capacity and market value of the DRAM market from 2023 to 2025.

Specifically, HBM’s share of total DRAM bit capacity is estimated to rise from 2% in 2023 to 5% in 2024 and surpass 10% by 2025. In terms of market value, HBM is projected to account for more than 20% of the total DRAM market value starting in 2024, potentially exceeding 30% by 2025.

2024 sees HBM demand growth rate near 200%, set to double in 2025

Wu also pointed out that negotiations for 2025 HBM pricing have already commenced in 2Q24. However, due to the limited overall capacity of DRAM, suppliers have preliminarily increased prices by 5–10% to manage capacity constraints, affecting HBM2e, HBM3, and HBM3e. This early negotiation phase is attributed to three main factors: Firstly, HBM buyers maintain high confidence in AI demand prospects and are willing to accept continued price increases.

Secondly, the yield rates for HBM3e's TSV currently range only from 40% to 60%, with room for improvement. Moreover, not all major suppliers have passed customer qualifications for HBM3e, leading buyers to accept higher prices to secure stable and quality supplies. Thirdly, future per Gb pricing may vary depending on DRAM suppliers' reliability and supply capabilities, which could create disparities in ASP and, consequently, impact profitability.

Looking ahead to 2025, from the perspective of major AI solution providers, there will be a significant shift in HBM specification requirements toward HBM3e, with an increase in 12Hi stack products anticipated. This shift is expected to drive up the capacity of HBM per chip. According to TrendForce predictions, the annual growth rate of HBM demand will approach 200% in 2024 and is expected to double in 2025.

For further details of this press release, including the accompanying tables and figures, please visit: https://www.trendforce.com/presscenter/news/20240506-12125.html

For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://www.trendforce.com/news/

About TrendForce (www.trendforce.com)

TrendForce is a global provider of the latest development, insight, and analysis of the technology industry. Having served businesses for over a decade, the company has built up a strong membership base of 500,000 subscribers. TrendForce has established a reputation as an organization that offers insightful and accurate analysis of the technology industry through five major research departments: Semiconductor Research, Display Research, Optoelectronics Research, Green Energy Research, and ICT Applications Research. Founded in Taipei, Taiwan in 2000, TrendForce has extended its presence in China since 2004 with offices in Shenzhen and Beijing.

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#TrendForce predicts a 5-10% increase in HBM prices for 2025, expecting HBM to comprise over 30% of total DRAM value as demand for AI chips drives market expansion