In fact, Samsung is doing everything it can to assuage the current DRAM drought in impressive leaps and bounds. The company intends to begin production from a new factory in Pyeongtaek, South Korea, by 2028. This move comes at a time of skyrocketing demand for DRAM, especially for use in AI-related data centers. As inflation continues to wreak havoc on the industry, it leads to rampant supply constraints. To get there, experts suggest that a combination of innovation and building new fabrication facilities—or fabs—will be needed to produce the most effective solutions.
For all aspects of recent developments in the global market. This plight comes from the increasing reliance on DRAM for graphics processing units (GPUs) and other accelerators essential to AI data hubs. Now, as demand skyrockets, the effects on pricing and availability are becoming more obvious by the day. The rapidly-changing landscape continues to require bold moves from trailblazing companies such as Samsung. This has always been an important company in the DRAM space.
The Current State of DRAM Supply and Demand
That is why DRAM is not just an important technology. It’s a foundational technology that makes possible the most brilliant, high-performance applications including AI. Semi High-bandwidth memory (HBM) standards have transformed DRAM possibilities. The new HBM4 standard supports up to 16 stacked DRAM dies. Conversely, today’s chips use an average of just 12 dies, demonstrating a major opportunity for innovation across the sector.
The flare of a DRAM tower is easily 750 micrometers thick. It consists of multiple layers of DRAM stacked on a processing base die, which provides for communication between memory dies and processors. This design brings the benefits of greater efficiency and performance while creating the difficulty of keeping up with growing global demand.
In this vein, experts have pointed out there are two overarching strategies for tackling supply bottlenecks in the DRAM market. Mina Kim, an industry analyst, stated, “There are two ways to address supply issues with DRAM: with innovation or with building more fabs.” As manufacturers find themselves under unprecedentedly steep pressure to churn out more and more memory chips, these options are gaining newfound relevance.
Additionally, the demand for DRAM in AI data centers is diverting supply from other uses, creating a ripple effect across various sectors. The result has been a staggering rise in DRAM commodity product pricing, hurting consumers and American businesses competing in the global economy.
Innovations in DRAM Technology
Samsung’s dedication to innovation has long been shown through its leadership in stacking technology. The venture moved ahead with a successful production of a 16-high stack of DRAM using hybrid bonding technology in 2024. This accomplishment heralds Samsung as the leader of DRAM technology and showcases its ability to adjust to market needs.
In addition, Samsung promised that it wouldn’t be long before we’d see a stack of 20 dies. This early stage discovery has the potential to radically enhance the performance capabilities of factory produced DRAM chips. It will position them to better respond to the growing needs of emerging applications.
Each of the eight HBM chips used in the B300 model consists of a stack of 12 DRAM dies. This configuration allows us to demonstrate the latest technical achievements in DRAM technology. It underscores the importance of continuous improvement as firms work to improve their efficiency and manage costs.
Shawn DuBravac, another industry expert, emphasized the need for strategic expansions: “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.” Only time will tell, but this multifaceted approach might be what it takes to finally stabilize the market during the next few years.
The Financial Impacts of the Shortage
The fiscal impact from the lingering DRAM shortage has been huge. South Korea’s major memory and storage manufacturers, including Samsung, have cut their production in half. To remain resilient to planting recessionary trends that the industry has been experiencing, they’re going the drastic length of… This unexpected contraction is a stark reminder of the challenges that manufacturers are facing as they try to match supply with rapidly changing demand.
Micron Technology’s initial commitment had been to achieve certain production milestones. They exceeded those numbers two years ahead of schedule due to a boom in demand. Yet this success spotlights just how capricious the market can be. Private industry especially has to be nimble in its approach in order to move with best possible direction.
With unprecedented demand, prices are skyrocketing. Industry analysts are cautioning that any relief will take a long time to reach consumers. Mina Kim remarked on this phenomenon: “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.”
New fabs for DRAM production require a massive capital expenditure, frequently in excess of $15 billion. This large expense adds another hurdle for producers looking to grow their capacity. The one-two punch of high capex and a moving market makes the calculus as of now very tough for companies looking to invest in new facilities.