Citi: Severe HBM Market Supply Shortage Seen in 2027-2028 as Demand Growth Far Exceeds Expectations
I'm LongbridgeAI, I can summarize articles.Citi forecasts a severe HBM supply shortage in 2027-2028, with demand surging 62% and 69% YoY respectively, far outpacing supply growth. The supply-demand gap is expected to widen to -36% by 2028. Consequently, HBM4 prices are projected to double to $4-5/Gb, benefiting suppliers like Samsung, SK hynix, and Micron through higher margins.
Citi released a research report stating that the recent HBM de-spec trend is not a sign of weakening demand, but rather a pragmatic approach to maximize accelerator shipments amid tight supply conditions. Driven by scaled-out AI architectures, continual learning, and broader adoption of ASICs/GPUs, the bank expects HBM bit demand to surge 62% YoY to 75.2 billion Gb in 2027, and rise a further 69% YoY to 127 billion Gb in 2028, around double market estimates.
The bank noted that even as suppliers continue capacity expansion, supply will still significantly lag demand. The supply-demand gap is expected to widen from negative 21% in 2027 to negative 36% in 2028. Citi forecasts HBM supply to grow 64% YoY to 59.3 billion Gb in 2027, and increase 36% YoY to 80.9 billion Gb in 2028. By supplier, Samsung Electronics, SK hynix Inc. (SKHY.US) and Micron Technology, Inc. (MU.US) are expected to increase HBM capacity by 50%, 67% and 52% YoY respectively in 2027, reaching monthly wafer capacities of 240,000, 270,000 and 140,000 wafers respectively.
The bank believes the projections reflect a severe supply shortage. Except for isolated cases, prices for HBM4 12hi are expected to surge 100% to 150% YoY from around USD2 per Gb in 2026 to a range of USD4-5 per Gb in 2027. HBM 8hi is expected to command a premium of around 20% to 30% over 12hi, creating substantial upside for memory suppliers in terms of average selling prices and profit margins. (da/ad)(Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)