The DRAM market is changing more quickly than ever. Industry leaders such as Samsung are moving the leading edge of technology to keep pace with this rapidly increasing demand, creating innovative solutions. At 2024, Samsung demonstrated its hybrid-bonding capability to stack up to 16-high. Heralded as a monumental step ahead in manufacturing memory chips. Demand is soaring—not least because of the other culprit: AI data centers. This terrible state of affairs underscores an immediate and growing demand for creative fixes to address waning supply and rising cost.
The demand for DRAM is through the roof. This is particularly true for the kind that powers GPUs and other accelerators in AI data centers. This demand requirement has soaked up supply from other memory uses, exacerbating a dramatic increase in price. All industries are starting to rely more and more on compute power. Experts are clear that without drastic changes to production capacity, it’s not going to improve.
Innovations in Memory Technology
Samsung’s latest moves are an encouraging sign that they’re taking the long view and getting ahead of the curve on expanding market demand. To promote itself a little bit, the company recently celebrated its first production of a 16-high stack with hybrid bonding technology. This breakthrough improves the productivity and performance of memory semiconductors. The B300 model uses a total of eight High Bandwidth Memory (HBM) chips. Each chip consists of a vertical stack of 12 DRAM dies.
And the promise for future innovation doesn’t stop there. Samsung gave an indication of how close it is to achieving a 20-die stack with hybrid bonding. This latest advancement continues to test the limits of what DRAM technology is capable of. These innovations couldn’t come at a better time. There are nearly 2,000 new data centers of all types planned or under construction worldwide, and each will need increasingly expensive and scarce DRAM resources.
“Relief will come from a combination of incremental capacity expansions by existing DRAM leaders, yield improvements in advanced packaging, and a broader diversification of supply chains.” – Shawn DuBravac
The Economic Landscape of DRAM
Even with these technological advancements, the economic realities of the DRAM market are daunting. This continuing thirst for compute resources is pointedly propping up DRAM prices as well. Even with expanded production capacity, an immediate drop in prices is unlikely.
Mina Kim, an expert in the field, notes, “In general, economists find that prices come down much more slowly and reluctantly than they go up. DRAM today is unlikely to be an exception to this general observation, especially given the insatiable demand for compute.” This perspective highlights the complex interplay between supply and demand and underscores the urgency for solutions to this ongoing crisis.
Additionally, creating new fabrication plants—what the industry calls fabs—can take years and billions of dollars to construct. It can take more than a year and a half to build and put into service a new facility, costing more than $15 billion. Even the ones above only point toward major delays in addressing existing supply gaps.
“There are two ways to address supply issues with DRAM: with innovation or with building more fabs.” – Mina Kim
Producers have been hard at work to increase production capacity by adopting new innovations and constructing facilities. They need to consider the broader impact to price and access in industries that rely on DRAM innovation.
Future Production Plans
Samsung’s plans for expansion include initiating production at a new plant in Pyeongtaek, South Korea, targeted for completion in 2028. This investment will strengthen the company’s capacity to manufacture in order to better serve increasing global demand, while filling worldwide supply gaps.
As industries across the world have developed and adopted exciting new technologies, especially in AI, the demand for DRAM has been strong. Nvidia’s data center business is a mind-boggling marvel of expansion. Its market capitalization skyrocketed from just over $1 billion in late 2019 to a projected $51 billion by October 2025. This type of expansion amplifies the demand for trustworthy memory solutions as enterprises continue to activate the power of AI.
The path forward is not without pitfalls. According to trend’s overall market sentiment, greater innovations in memory chip production could provide some good news. They won’t be producing lower prices or more availability any time soon.