The rise of AI is pushing up the prices of the hardware necessary to run it, and this includes HBM memory. Avril Wu, Senior Research Vice President at TrendForce, says that the market for HBM memory will see strong growth thanks to AI chips that require ever more memory and memory bandwith for its workloads.
TrendForce is predicting a growth rate of 200% for HBM in 2024. While this is an imposing number, 2025 is looking even more dramatic with a doubling of growth in comparison to 2024. This will mostly be from a shift AI providers will make towards utilizing HBM3e.
Pricing for HBM memory is already being affected, as suppliers are increasing prices by 5-10% because of limited capacity. The scramble to acquire high bandwidth memory is being driven by AI, with Wu saying that “HBM buyers maintain high confidence in AI demand prospects and are willing to accept continued price increases.” These increases will be affecting HBM2e, HBM3 and HBM3e.
Relatively low yields are also adding to the cost of acquiring HBM memory. Wu says that HMB3e yield rates are only hitting about “40% to 60%,” which is not great. The upside is that it means there’s big opportunity for improvements down the line that might help with pricing and availability. However, in the here and now it means that companies looking to secure a quality supply of memory will pay a premium for doing so.
The numbers for just about everything related to AI continues to skyrocket and companies working on providing AI solutions are ponying up the dough. Although, the real question is whether businesses and everyday users will think it’s worth it to keep paying every higher prices for software powered by AI.