[Edaily Reporter Kim Kyung-eun ] SamsungElectronics(005930)Although DRAM production capacity is increasing by double digits, forecasts indicate that the shortage of standard DRAM will actually worsen. This is because most of the increased production capacity is being concentrated on High Bandwidth Memory (HBM) and high-capacity products for servers. With delivery times for server-grade DDR5 taking up to one year after an order is placed, standard DRAM prices are also expected to continue their double-digit upward trend.

Kim Dong-won, Head of Research at KB Securities, stated in a report on the 22nd, “The restructuring of DRAM production capacity centered on HBM is a structural change that simultaneously triggers a prolonged shortage of standard DRAM and rising prices.”

According to KB Securities, SamsungElectronics’ monthly DRAM production capacity, measured in wafers, is projected to increase by 14% and 16% year-over-year this year and next year, respectively. However, the share of HBM in total DRAM production capacity is expected to expand from 27% last year to 33% this year and 40% next year. Conversely, the share of standard DRAM is projected to decline from 73% to 65% and then to 59% over the same period.

This means that while overall DRAM production capacity is increasing, the actual supply capacity for general-purpose DRAM is shrinking. This is because HBM consumes more wafers than general-purpose DRAM, and new capacity expansions are being prioritized for HBM and high-capacity server products. KB Securities predicted that as the shift toward HBM-centric production capacity accelerates, supply constraints for general-purpose DRAM will intensify, leading to a structural supply shortage continuing into next year.

The supply crunch is already clearly evident in server DRAM. As of September, the lead time (the period from order to delivery) for high-capacity DDR5 server memory has reportedly increased to a maximum of 52 weeks. This is more than eight times longer than the typical 6-week lead time in a normal market. It is an extraordinary situation where it effectively takes a year to receive an ordered product.

As SamsungElectronics prioritizes allocating supply to hyperscalers under long-term supply agreements (LTAs), the volume available on the spot market and to general customers is also becoming limited. SamsungElectronics’ DRAM inventory is estimated to have fallen to a historic low of less than 10 days’ worth as of this month.

Consequently, the upward trend in general-purpose DRAM prices is expected to continue. KB Securities forecasts that general-purpose DRAM prices will rise by double digits in the third and fourth quarters, exceeding market expectations. The firm assesses that a structural imbalance has emerged where even an increase in new production capacity will struggle to keep pace with the rate of demand growth.

SamsungElectronics’ HBM4 revenue growth is also expected to accelerate. Third-quarter HBM4 revenue is projected to more than triple compared to the previous quarter, and HBM4 is expected to account for more than 60% of total HBM revenue in the second half of the year. As mass production of HBM4E expands next year, the share of HBM4 revenue is projected to double from 40% this year to 80% next year. Accordingly, KB Securities forecasts that HBM4 revenue next year will more than double compared to this year.