According to the Korea International Trade Association on Oct. 31, export volumes of DRAM used to build AI chips, including HBM and low-power double data rate (LPDDR) products, fell 13.2% from about 681.79 million units in May to 591.74 million in July. Yet total DRAM export value rose 18.5% over the same period, from $11.43 billion to $13.55 billion, while the average export price jumped 36.6% from $16.76 to $22.90.
Expanding HBM4 supply to big tech customers such as Nvidia has absorbed DRAM capacity, driving prices higher. HBM4, still in the early stages of mass production, also carries lower yields than its predecessor HBM3E, consuming more DRAM in production and deepening the overall DRAM shortage.
"HBM has a characteristic of declining yields with each new version upgrade," said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association. "HBM4 prices are about twice as high as the previous generation, so as memory companies ramp up production, the volume of DRAM consumed increases, which ultimately reduces total export volumes."
The shift by Samsung Electronics and SK hynix toward long-term agreements (LTAs) as the core of their sales structure is also aggravating the squeeze in the spot market. Industry sources say Samsung's memory division has allocated about 70% of its production capacity through 2031 to LTA volumes. Its main counterparties are global big tech firms including Nvidia, Microsoft and Google.
Even those big tech customers are not receiving their full contracted volumes, and the intensity of competition to secure HBM is pushing spot prices even higher. According to memory market research firm MegaGrid Supply, a 36-gigabyte HBM3E product sells for $2,100 (about 2.87 million won) — four to five times the long-term contract price, reported at roughly 500,000 to 700,000 won. HBM4 16-layer products, whose mass production is still being coordinated, fetch about $3,500 (roughly 4.8 million won) when purchased on the spot market rather than under an LTA.
Samsung Electronics and SK hynix are pursuing multiple avenues to expand capacity, judging that the memory shortage will not ease quickly. Executives at Samsung's Device Solutions division are weighing converting S5 — the only foundry line at the Pyeongtaek campus — into memory facilities as early as next year.
SK hynix, after expanding production bases in Yongin and the Honam region, is also said to be considering setting up a joint venture plant in Japan with a local partner. The industry is watching the possibility that SK hynix expands cooperation with Kioxia, Japan's top NAND flash maker in which it is effectively the largest shareholder, to strengthen its influence in the global memory supply chain.
Rising prices driven by the deepening shortage are expected to fuel record earnings at both companies. Financial analysts expect Samsung and SK hynix to set new all-time highs again in the third quarter.
Over the past month, the consensus for Samsung's third quarter stands at 206.64 trillion won in revenue and 116.38 trillion won in operating profit, far above second-quarter figures of 171.50 trillion won and 89.49 trillion won. Crossing 100 trillion won in operating profit would be a first not only for a Korean company but also among global big tech firms.
SK hynix is projected to post third-quarter revenue of 101.76 trillion won, up 28.2% from the previous quarter, and operating profit of 79.16 trillion won, up 30.7%.
"To resolve the chip shortage, more fabs need to be built," Ahn said. "Even when the planned new plants come online, the shortage will only be eased, not eliminated."
