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Driven by the increase in AI demand, Samsung predicts that the memory shortage will continue until 2028. Demand for HBM and NAND is strengthening together, and long-term supply agreements are more likely to contract most production capacity before 2030.
SAMSUNG Electronics said on the 29th that due to the increase in demand driven by the increase in artificial intelligence (AI), the supply of memory chips will continue to remain tight until 2028. Even if there is a significant increase in capital expenditure next year, increased new factory construction expenditure and the length of equipment delivery times may still limit production growth in 2028.
Samsung Electronics also pointed out that the expansion of the die size of the seventh-generation high-bandwidth memory (HBM) HBM4E and the next-generation HBM5 and the increase in the number of process layers have reduced the output of each wafer, which are all limiting factors for the expansion of supply.
Samsung Electronics expects demand for AI-powered DRAM this quarter to be mainly driven by “products related to central processing units (CPU) and graphics processing units (GPU) platforms.”Huida (NVIDIA ) strictly requires high-bandwidth memory (HBM), HBM4 Rubin graphics chips, as well as Vera CPUs.
Samsung Electronics said next year’s HBM supply has been effectively allocated, but key customers continue to request additional supply.
In the NAND flash memory segment, Samsung Electronics also noted that demand related to the “expansion of personal AI agent services” has led to a “surge” in its solid-state drive storage demand.
Samsung Electronics said it has signed long-term supply agreements (LTAs) with 10 major customers and is in talks with 10 more, as more customers seek stable long-term memory supplies across a wide range of industries, including hyperscalers, server makers, and mobile, automotive and Internet companies.
Samsung Electronics revealed that given the current pace of contract negotiations, it is increasingly likely that 60%-70% of production capacity before 2030 will be covered by long-term supply agreements.
After the terms of the original contract expire, these long-term supply agreements may be adjusted on a rolling basis, with extended terms negotiated each year, and some customers requiring additional extensions of time, even longer than originally expected.
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Samsung pointed out that the AI boom has boosted demand for DRAM and HBM, as well as increased construction costs of new factories and longer equipment delivery times, limiting the pace of production capacity expansion, so supply shortages may persist until 2028.
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Samsung said the HBM4E and HBM5 have larger die sizes and more process layers, which will reduce the number of outputs per wafer. Even if production is expanded, it will be difficult to increase supply quickly.
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Samsung has signed long-term supply agreements with 10 major customers, and is under negotiation with another 10; If the current pace continues, 60% to 70% of the generation capacity could be contracted in advance by LTA before 2030.
