AI BriefingAI Data Centers Are Driving Up Memory Prices
Key point
Rising HBM demand from AI data centers is squeezing consumer memory production, pushing up electronics prices.
Details
The wafer production capacity held by the three memory manufacturers is fixed, and this capacity is split among DDR (desktop/server), LPDDR (mobile devices), and HBM (for GPUs).
Until recently, HBM accounted for only 2% of total wafer allocation, but with the growth of AI data centers, it is projected to rise to 20% by the end of 2026. Producing 1GB of HBM requires more than 3 times the wafer capacity compared to 1GB of DDR/LPDDR.
Having learned lessons from the downfall of competitors, memory companies always keep facilities in short supply. Due to HBM's high profitability and demand, RAM production for consumer devices will be constrained for years to come.
This impact is already showing up in the sub-$100 smartphone market, which is especially important for markets like Africa and South Asia.
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