Rising HBM Demand and Its Ripple Effect on DDR5 Pricing

Table of Contents

High Bandwidth Memory (HBM) is experiencing unprecedented demand driven by the rapid scaling of AI server deployments. Both Micron and SK Hynix report that their entire HBM supply for 2024 and 2025 is already sold out. TrendForce projects that this surge will push HBM prices up by 5–10%, while DDR5 prices may increase by 15–20% as manufacturers reallocate fabrication capacity toward HBM.

📈 The HBM Price and Production Effect
#

HBM is structurally more complex—and far more expensive—than conventional DRAM. Each HBM stack costs roughly 5× more than DDR5, reflecting its advanced packaging, higher bandwidth, and vertically stacked architecture.

As memory suppliers shift more wafer starts toward HBM to meet AI demand, output for standard DRAM inevitably declines. This supply contraction is already driving notable price increases:

DRAM prices have risen double digits for three consecutive quarters starting Q4 2023.
In April alone, server DRAM categories saw 9–19% price jumps.

This dynamic tightens availability for DDR5 modules, cascading into higher prices across the ecosystem.

📊 Market Share and Financial Impact
#

HBM is taking up a rapidly growing share of DRAM bit output:

2023: 2%
2024: 5%
Late 2025: >10% expected

Despite representing a small fraction of bit volume, HBM’s high selling price means its market value share may exceed 30% by 2025.

Preliminary pricing discussions for 2025 began as early as Q2 2024 due to the limited DRAM supply pipeline. Early negotiations point to the projected 5–10% HBM price increase, driven by persistent AI acceleration and production constraints—especially HBM3E TSV yields currently hovering at just 40–60%.