Micron has entered the high-bandwidth memory (HBM) market, breaking the longstanding dominance of Samsung Electronics and SK Hynix. Despite being a latecomer, Micron began supplying small quantities to Nvidia in the second quarter, creating a three-way competition in the HBM sector.
Industry insiders reported on July 1 that Samsung, SK Hynix, and Micron, now producing HBM3E, the fifth-generation HBM product, are locked in a technology race. SK Hynix currently leads in yield and supply, having initiated mass production of HBM3E in the second quarter.
SK Hynix was the first of the three companies to pass Nvidia’s qualification test and become the primary supplier. Industry estimates suggest that SK Hynix’s HBM3E yields have stabilized, with operating margins reportedly double those of DRAM (dynamic random access memory).
However, SK Hynix faces challenges in expanding its HBM3E production capacity. “Nvidia is pressuring SK Hynix to increase supply, but with the production of both HBM3E and the previous generation HBM3, the available capacity is nearly maxed out,” said an insider familiar with the situation.
Micron’s entry into the market has been marked by limited supply due to yield issues. According to Micron’s fiscal third-quarter earnings report, the company sold $100 million worth of HBM3E to Nvidia between March and May. Given the high unit cost of HBM3E, this figure indicates a modest supply.
Micron is also facing yield challenges. Public data from the company shows that the operating margins of its HBM business are not as robust as those of its DRAM business, despite HBM typically commanding a two to three-time premium over DRAM prices. This suggests that Micron’s HBM business has yet to be fully profitable.
“Micron has announced plans for mass production and supply of HBM3E next year, so a significant increase in supply volume within this year is unlikely,” a semiconductor industry insider said. “For Nvidia, the current supply from SK Hynix is insufficient, necessitating the acceleration of Samsung’s HBM3E quality certification to boost AI accelerator sales.”
