Samsung plans to price HBM4 more than three times that of HBM3E

South Korea's "MAEIL Business" disclosed on the 2nd that Samsung Electronics has set the supply price of HBM4 next year to be more than three times that of the existing flagship product HBM3E. HBM4 is Samsung's next-generation high-bandwidth memory (HBM). As next year's flagship product will be upgraded to HBM4, Samsung's profit margin is also expected to increase significantly.

Semiconductor industry sources revealed that Samsung has recently been negotiating with major customers on HBM4 supply contracts for next year, and has proposed a quotation of US$4.5 to US$4.9 per Gb, which is more than three times the current price of HBM3E of approximately US$1.5 per Gb.

Different from traditional DRAM, HBM mainly supplies based on annual long-term contracts. Major customers and manufacturers will negotiate in advance on the supply quantity and price for the coming year.

Samsung Electronics’ decision to significantly increase prices shows its confidence in HBM4. The company's HBM4 has stably reached a data transmission speed of 11.7 Gbps, and can reach a maximum transmission speed of 13 Gbps, the highest transmission speed in the industry. Samsung's strategy is to translate its ability to consistently supply specs higher than those of its competitors into price premiums.

HBM4 is expected to be a turning point in HBM market competition, that is, the focus will shift from supply quantity to quality. At present, the key to competition in the HBM market is to pass the quality verification of major customers such as Huida, enter their supply chain, and then gradually increase production.

However, starting from HBM4, artificial intelligence (AI) accelerators have further increased memory performance requirements, making performance differences, including speed and energy efficiency, an important factor in determining price, even for products of the same generation.

Furthermore, with the expansion of investment in AI infrastructure, the demand for HBM has also grown rapidly. However, the supply is still limited, and the transformation to HBM4 has created favorable conditions for Samsung to increase the price premium of its high-performance products.

Market research company TrendForce predicts that driven by HBM4’s market share growth and supply shortages, the average price of HBM will increase by 121% next year compared with this year.