The world's two largest memory chip suppliers SK Hynix and Micron announced the end of high-bandwidth chips for 2024, and stocks for 2025 are also almost sold out.
"We expect total storage’to remain limited through 2024, — Kazunori Ito, director of equity research at Morningstar, said in a report last week, CNBC reports.
A shortage of chips is causing an explosive demand for artificial intelligence. High-performance memory chips are needed by large language models (LLMs) to remember details of past conversations with users and their preferences, to generate human responses to queries and for other training.
Large technology companies Microsoft, Amazon and Google are spending billions on training their own masters of law to stay competitive, fueling demand for AI chips.
"Manufacturing these chips is more complex, and ramping up production has been difficult. This is likely to lead to shortfalls for the rest of 2024 and most of 2025», — said William Bailey, director of Nasdaq IR Intelligence.
The production cycle of HBM is longer by 1.5-2 months compared to the DDR5 memory chip commonly found in PCs and servers, TrendForce reported in March.
SK Hynix already supplies chips to Nvidia, but the company said it is also considering Samsung as a potential supplier. To meet the rapidly growing demand, SK Hynix plans to expand production capacity by investing in modern packaging facilities in Indiana, USA, as well as the M15X factory in Cheonju and the Yongin semiconductor cluster in South Korea.
Samsung receives $6.4 billion for factories for the production of microcircuits. During its first-quarter earnings call in April, Samsung said that its 2024 HBM bit shipment “more than tripled from last year”.
"And we have already completed discussions with our customers about this committed delivery. In 2025, we will continue to increase supply by at least double or more year-on-year and we are already in smooth negotiations with our customers for this supply», — Samsung said.
SK Hynix said at a press conference earlier this month that it will begin mass production of its latest generation of HBM chips, the 12-layer HBM3E, in the third quarter, while Samsung Electronics plans to do so in the second quarter, as it is the first in the industry to ship samples of the newest chip.
«For now, Samsung is ahead in the 12-layer HBM3E sampling process. If they can qualify ahead of their peers, I guess he could get most of the shares in late 2024 and 2025», — said S. K. Kim, executive director and analyst at Daiwa Securities.