Samsung Sells Out Next Year’s HBM Supply

Samsung Electronics said on the 29th, during its third-quarter earnings call, that it expects memory supply shortages to continue through 2028. Jaejoon Kim, executive vice president of Samsung’s Memory Business, said unprecedented demand strength is expected to continue next year amid competition to build AI infrastructure and the spread of personal AI agents. He said forecasts from several market research firms point to tight supply in 2028 as well, because it takes time for expanded industry investment to translate into higher production.

Samsung said it has completed negotiations for next year’s high-bandwidth memory (HBM) supply, and the volumes agreed at target prices are already sold out. It continues to receive requests from major customers for additional quantities. Third-quarter HBM4 revenue was more than 3 times the previous quarter’s level, and HBM4’s share of total HBM revenue rose to around 60%. Kim said Samsung appears to have reached in the third quarter its goal of securing an HBM market share matching its overall DRAM share in the second half. He added that HBM4E, whose samples Samsung first shipped worldwide in May, has received positive responses in initial customer evaluations.

Responding to industry concerns that increased investment by memory makers could lead to oversupply after 2028, Kim said much of the additional spending goes toward securing new space, while construction costs per unit of space have also risen, making investment totals look larger. Samsung’s position is that next year’s investment increases are unlikely to materially contribute to production in 2028, given the long time required to build new factories and begin wafer production. Its future main products, HBM4E and HBM5, will have larger dies and more metal process layers than previous generations. Production conversion between HBM and commodity DRAM is also increasing, which Samsung said will inevitably constrain physical supply growth. Because macroeconomic and other factors can affect market conditions, Samsung said it will secure cleanroom space first, then adjust equipment purchases flexibly while monitoring demand.

Samsung said interest in long-term agreements (LTAs) is expanding beyond AI companies to mobile, automotive and network companies. It has completed multiyear supply contracts with 10 major customers and is negotiating with 10 other key customers, with some talks nearing completion. Samsung said the likelihood of reaching its goal of covering 60–70% of production capacity with long-term contracts by 2030 has become clearer. The customer base also includes hyperscalers and server and system-on-chip (SoC) companies.

Samsung operates long-term contracts on a rolling basis, extending each customer’s contract period by 1 year annually. Talks with some customers on an additional extension period are nearing completion, and Kim said demand for that period is far above initial expectations. Customers have also requested extra supply under existing contract periods, but available volumes are insufficient. Samsung is considering changes to applications and product configurations in response. It said additional facility investment will be adjusted flexibly while it monitors demand.

Samsung Electronics said on the 29th, during its third-quarter earnings call, that it expects memory supply shortages to continue through 2028. Jaejoon Kim, executive vice president of Samsung’s Memory Business, said unprecedented demand strength is expected to continue next year amid competition to build AI infrastructure and the spread of personal AI agents. He said forecasts from several market research firms point to tight supply in 2028 as well, because it takes time for expanded industry investment to translate into higher production.

Samsung said it has completed negotiations for next year’s high-bandwidth memory (HBM) supply, and the volumes agreed at target prices are already sold out. It continues to receive requests from major customers for additional quantities. Third-quarter HBM4 revenue was more than 3 times the previous quarter’s level, and HBM4’s share of total HBM revenue rose to around 60%. Kim said Samsung appears to have reached in the third quarter its goal of securing an HBM market share matching its overall DRAM share in the second half. He added that HBM4E, whose samples Samsung first shipped worldwide in May, has received positive responses in initial customer evaluations.

Responding to industry concerns that increased investment by memory makers could lead to oversupply after 2028, Kim said much of the additional spending goes toward securing new space, while construction costs per unit of space have also risen, making investment totals look larger. Samsung’s position is that next year’s investment increases are unlikely to materially contribute to production in 2028, given the long time required to build new factories and begin wafer production. Its future main products, HBM4E and HBM5, will have larger dies and more metal process layers than previous generations. Production conversion between HBM and commodity DRAM is also increasing, which Samsung said will inevitably constrain physical supply growth. Because macroeconomic and other factors can affect market conditions, Samsung said it will secure cleanroom space first, then adjust equipment purchases flexibly while monitoring demand.

Samsung said interest in long-term agreements (LTAs) is expanding beyond AI companies to mobile, automotive and network companies. It has completed multiyear supply contracts with 10 major customers and is negotiating with 10 other key customers, with some talks nearing completion. Samsung said the likelihood of reaching its goal of covering 60–70% of production capacity with long-term contracts by 2030 has become clearer. The customer base also includes hyperscalers and server and system-on-chip (SoC) companies.

Samsung operates long-term contracts on a rolling basis, extending each customer’s contract period by 1 year annually. Talks with some customers on an additional extension period are nearing completion, and Kim said demand for that period is far above initial expectations. Customers have also requested extra supply under existing contract periods, but available volumes are insufficient. Samsung is considering changes to applications and product configurations in response. It said additional facility investment will be adjusted flexibly while it monitors demand.