“Memory chips are experiencing a significant impact from the rise of AI, with the main driver currently being the demand for HBM in data centres, but not yet from smartphones,” Simon Woo, managing director and coordinator of Asia-Pacific Technology Research at BofA Securities, told the South China Morning Post on Friday.
That is projected to result in about an 80 per cent revenue growth for the global memory chip market this year, compared with the low base last year, according to Woo.
HBM chips, which are typically bundled with AI accelerators such as Nvidia’s H100 graphics processor unit, are an indispensable component for developing large language models, the technology behind generative AI services such as OpenAI’s ChatGPT. This market segment is dominated by South Korea’s SK Hynix, which has a 50 per cent global market share, followed by Samsung Electronics and US-based Micron Technology.
A 3D rendering of high bandwidth memory chips bundled with an advanced artificial intelligence processor built on servers in a data centre. Photo: Shutterstock
Mainland China currently accounts for about 30 to 35 per cent of global memory consumption, according to Woo. Under current market conditions, “China will rely more on Korean memory chips as its AI ecosystem grows”.
“China’s [semiconductor] supply chain is still insufficient for high-end memory fabrication, with its growth mainly focused on mid to low-end solutions,” he said.
That reflects the work that China, which is burdened by US tech restrictions, must accomplish to narrow the gap in the memory chip segment.
China is still in an early stage of HBM development. The country’s top dynamic random access memory maker, ChangXin Memory Technologies (CXMT), is the country’s best hope for HBMs, but it may take up to four years to bring products to the market, the Post reported in October. CXMT is working with domestic semiconductor packaging firm TongFu Microelectronics to produce HBM samples, according to a Reuters report last month.
SK Hynix competes with Samsung Electronics and Micron Technology in high-bandwidth memory chips. Photo: Shutterstock
Woo, however, said China may find opportunities in lower end memory products for implementing AI on so-called edge device applications such as autonomous vehicles, and AI-enabled smartphones and personal computers, which do not require HBM.
The memory sector experienced a collapse last year owing to a decline in demand for smartphones, PCs and traditional servers – the three major products driving demand for memory chips, Woo said.
“Even after the rapid growth this year, AI will continue to fuel demand, increasingly driven by edge AI on individual smartphones,” Woo said. “It will further contribute to around 20 per cent growth in industry revenue in 2025.”
China’s semiconductor supply chain, however, may face further restrictions. The US is reportedly pressing its allies Japan and the Netherlands to limit China’s capabilities to develop HBM chips, Bloomberg reported last week.
