Author: Zhou Yuan/Wall Street View
Concept stocks related to Generative Artificial Intelligence (GAI) have shown fluctuations in the A-share market, but the heat in the upstream of the industry chain remains high.
Whether it is intelligent devices on the mobile end or servers, various specifications of DDR or DRAM are still experiencing across-the-board price increases.
Wall Street View has exclusively learned from the supply chain that although there may be a shortage of supply in the second half of the year due to high demand for HBM in DRAM occupying production capacity, the trend of a significant price increase in various specifications of DRAM by leading memory companies starting from the third quarter of 2023 will not continue. &#34;The price increase of SK Hynix DRAM in the second half of the year will converge,&#34; said a person in the supply chain to Wall Street View.
Compared to the demand for server DRAM (Standard DDR), the demand for HBM is greater. Kwak No-jeong, CEO of SK Hynix, revealed at the &#34;AI Semiconductor Vision and Strategy&#34; meeting on May 2 that HBM products produced in 2025 have been sold out, and samples of HBM3E 12-Hi products will be released in June, with mass production starting in the third quarter of this year.
<h2>DRAM Price Surge Boosts Giant Performance</h2>
The market outlook for GAI technology currently lacks killer applications, but upstream memory prices have risen significantly.
On May 2, TrendForce revised its forecast for server DRAM contract prices in the second quarter of this year from the initial 3%-8% to 15%-20%. This marks the third consecutive quarter of double-digit percentage growth since the fourth quarter of 2023. In April of this year, prices for all categories of server DRAM rose by about 10%-20%.
The initial increase in DRAM prices was due to increased downstream demand, but since the beginning of this year, the impact of a strong earthquake in Taiwan, China has exceeded market demand; in addition, industry insiders stated, &#34;The demand for HBM is too high, leading the industry to seek performance alternatives, such as DDR5, which is relatively cheaper and has lower power consumption.&#34;
DDR5 DRAM is a type of computer memory technology. Compared to DDR4 memory, DDR5 standard has stronger performance and lower power consumption.
Micron Technology showcased the latest 256GB single MCRDIMM DDR5-8800 memory module at the NVIDIA GTC 2024 conference, which is currently the largest capacity single memory module on the market: utilizing DDR5 technology, with a operating speed of up to 8800MHz, far exceeding existing DDR4 memory modules
This memory module from Micron Technology is mainly designed to complement the upcoming new generation Xeon Scalable Granite Rapids server processor from Intel. The Granite Rapids processor (CPU) from Intel adopts a new architecture capable of handling AI workloads; servers equipped with Micron's memory module can have a memory capacity of up to 3T-6T, making it easy to accomplish GAI training tasks.
JEDEC has defined three widely used DRAM standards to meet the design requirements of various applications: standard DDR5, mobile DDR (LPDDR), and graphics DDR. Depending on system requirements, DDR5 is used in different forms across various terminals.
Standard DDR is targeted at servers, cloud computing, networks, laptops, desktops, and consumer applications, supporting wider channel widths, higher densities, and different form factors.
According to TrendForce's forecast, HBM3E's share in Samsung Electronics' 4th generation DRAM process is expected to increase significantly from 30% this year to 70% by 2025. Samsung Electronics and SK Hynix stated in their recent financial reports that apart from HBM, other DRAM products are expected to face supply shortages in the second half of the year.
In fact, the prices of various types of DRAM have been continuously rising for three consecutive quarters from the fourth quarter of last year to May this year, with a cumulative increase of 50%-60%. Supply chain sources informed Wall Street News that &#34;large DRAM manufacturers like SK Hynix still have not been able to replenish their inventory to normal levels, so the price increase of DRAM in the second half of the year may not be sustained.&#34;
The significant and continuous price increase of DRAM in the past three quarters is bringing substantial profits to major DRAM manufacturers.
On April 30th, Samsung Electronics announced its first-quarter financial report for 2024, showing a revenue of 71.9156 trillion Korean won (approximately RMB 384.26 billion) for the first quarter of 2024, higher than the previous quarter's 67.78 trillion Korean won (approximately RMB 362.92 billion), representing a 12.82% growth compared to the same period in 2023, which was 63.75 trillion Korean won (approximately RMB 340.23 billion).
Samsung Electronics' storage business revenue in the first quarter reached 17.49 trillion Korean won (approximately RMB 90.73 billion), an 11% increase from the previous quarter and a staggering 96% year-on-year increase, accounting for as high as 75.58% of the overall semiconductor business revenue.
SK Hynix achieved a revenue of 12.4 trillion Korean won (approximately RMB 651.7 billion) in the March quarter of this year, surpassing expectations and growing by 144% compared to the same period last year, marking the fastest growth since 2010.
<h2>Hynix TSMC Alliance Upgraded Again</h2>
Compared to HBM, the demand for server DDR DARM is much greater
SK Hynix's HBM new products produced in 2025 have been sold out, as revealed by SK Hynix CEO Kwak No-jeong on May 2.
More importantly, Kwak pointed out that although AI products are currently centered around data centers (IDC), AI technology is rapidly spreading to smartphones, personal computers, cars, and other devices. &#34;The demand for ultra-fast, high-capacity, low-power storage specifically for AI applications will surge,&#34; Kwak said.
SK Hynix's Infrastructure President Kim Ju-seon noted, &#34;HBM and high-capacity DRAM modules accounted for about 5% of the entire memory market in 2023, and are expected to reach 61% by 2028.&#34;
To this end, SK Hynix has prepared a diverse product portfolio including eSSD and LPDDR5.
eSSD (Enterprise Solid State Drive) refers to enterprise-level solid-state drives, which are storage devices that use flash memory as the storage medium.
Compared to traditional hard disk drives (HDD), eSSD offers faster data read/write speeds, lower power consumption, smaller size and weight, and better shock resistance. These features make eSSD ideal for applications requiring high-speed data access and high reliability, such as data centers, servers, high-performance computing, and enterprise storage solutions.
Unlike DRAM, HBM operates on a model where demand-side makes capacity reservations before the supply-side produces, hence there are no inventory issues like DRAM and no issues of excess capacity.
In the HBM3 or HBM3E generation, SK Hynix is the undisputed global technology leader. In fact, Hynix has increased its investment in HBM against the trend, leading to an operating profit surpassing Samsung Electronics by about $700 million in the first quarter of this year (March quarter).
In the previous decade, SK Hynix ranked second in the storage semiconductor field, but it seized the opportunity brought by the AI boom in the second half of 2022, surpassing Samsung Electronics and firmly establishing itself as the leader in AI storage.
&#34;HBM technology didn't come out of nowhere,&#34; Kwak said at a press conference on May 2. &#34;In 2012, when other companies cut their investments by 10% due to memory decline, we increased our investment, including the uncertain future of HBM.&#34;
With HBM4, Hynix's technological advantage faced a strong challenge from the former leader Samsung Electronics. Hynix's response was to enhance HBM packaging technology and explore hybrid bonding technology.
SK Hynix plans to start mass production of HBM4 at its advanced packaging manufacturing facility in Indiana, USA starting from the second half of 2028. Vice President Choi Woo-jin mentioned that discussions are underway on whether the factory will adopt a process similar to TSMC's CoWoS, involving advanced chip packaging technology used by companies like Nvidia and Apple, namely 2.5D technology
On May 2nd, Micron further enhanced its alliance strength in the HBM field. Following the signing of a Memorandum of Understanding (MOU) with TSMC in April to jointly develop next-generation packaging technology, Micron announced on May 2nd a strategic alliance with NVIDIA and TSMC, aiming to develop and supply top products in collaboration with global system semiconductor and foundry partners as a team

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The price increase of DRAM in the second half of the year is expected to slow down, but HBM production capacity remains scarce

Track Hyper | DRAM prices surge: Micron and Samsung both benefit