Samsung has scored a huge coup in the cut-throat semiconductor world. As an example of a productive outcome of this bonding advancement, they created a 16-high stack of high-bandwidth memory (HBM) with this hybrid bonding tech, and are moving towards a 20-stacked die configuration soon. This progress comes at an opportune time as the demand for dynamic random-access memory (DRAM) explodes, notably in artificial intelligence (AI) data centers. As a consequence, we’re seeing skyrocketing price increases like never before. Today’s HBM chips consist of 12 stacked DRAM dies. With the new HBM4 standard supporting up to 16 stacked dies, it’s set to be the next big thing for raising performance numbers to the sky and increasing capacity.
The increasing demand for DRAM is inextricably linked to the acceleration of AI capabilities. With trillions of dollars pouring into AI development, the demand for sophisticated data processing technologies has skyrocketed. DRAM drives the graphics processing units (GPUs) and other accelerators critical to innovation in today’s data center. Yet, it does not diminish its significance as a crucial pillar in the technology ecosystem.
Innovations in Memory Technology
Beyond Samsung’s recent success, this trend is very much on display in the current state of memory technology innovation. The company’s successful customer demonstration of the 16-high stack cements its position as the leader in advancing semiconductor manufacturing into new heights. They’re committed to revolutionizing the limits of what today’s technology can do. The opportunity to create a 20-die stack really illustrates their creative talent.
“There are two ways to address supply issues with DRAM: with innovation or with building more fabs,” – Mina Kim, an economist with Mkecon Insights.
This new model is essential because the industry is under immense pressure to deliver on the inflationary demand for compute. The DRAM itself features a tower-like structure, roughly 750 micrometers tall. Its base die in turn allows efficient communication between the memory stacked dies and processors. In turn, this design maximizes performance and efficiency, two fundamental requirements of today’s most demanding computing applications.
The implications of these advancements are profound. With Samsung still leading the charge, we can expect the efficiency and capacity of memory chips to become considerably more advanced. This could result in improved normalized performance per AI application, as well as greater operational efficiency for data centers running AI applications.
Market Dynamics and Demand Surge
And the demand for DRAM has exploded in recent years, especially with the boom of AI technologies. In reality, it’s NVIDIA’s data center business revenue that is skyrocketing. It leaped from just over $1 billion in late 2019 and is anticipated to soar to an incredible $51 billion by October of 2025. It’s no coincidence that this explosive growth highlights the vital role DRAM plays in making AI infrastructure possible.
There are almost 2,000 new data centers in the global pipeline or under construction. With this boom comes a growing need for high-capacity memory solutions. In the meantime, as these facilities come online they will demand unprecedented volumes of DRAM to accommodate them.
“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,” – Mina Kim.
The consequence of this localized demand surge is upward pressure on prices. Both industry experts and by the time relief arrives from these price hikes. Samsung’s new fab in Pyeongtaek, South Korea, is expected to come online in 2028.
Future Outlook and Production Capacity
Samsung has committed to raising its production capacity. They are constructing a second manufacturing fab in Pyeongtaek, due online in 2028. This new facility will greatly enhance Samsung’s capacity to better respond to the worldwide surging demand for memory products.
As Intel CEO Lip-Bu Tan put it to a group of investors, with all candor, “There’s no relief until 2028.” This sentiment represents one of the industry’s biggest worries—that overwhelming, unsustainable supply continues to be outmatched by rapidly rising demand.
“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, chief economist for the Global Electronics Association.
The upcoming generation of DRAM production will involve amazing new manufacturing powers. Beyond that, we should anticipate some tactical redirection across supply chains. As companies like Samsung invest in innovation and expansion, they aim to alleviate some of the pressures faced by the market.