The HBM Bottleneck: 3 Tech Companies Have Locked Up 85% of the Supply of AI's Scarcest Asset
Nvidia, Alphabet, and AMD have already bought most of the high bandwidth memory that will be manufactured next year.
Overview
One of the biggest bottlenecks in the AI infrastructure market is high bandwidth memory (HBM), and according to Morgan Stanley, three companies have locked up 85% of next year's production in advance: Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Advanced Micro Devices (NASDAQ: AMD).
HBM is a specialized form of DRAM that is frequently packaged with AI accelerators to reduce latency and optimize their performance. As the balance of AI workloads has shifted away from training and toward inference (in other words, putting trained models to work), demand for HBM has accelerated even more. Meanwhile, HBM supply remains constrained due to a few factors.
Details
The first reason is that while the big three HBM makers -- SK Hynix, Samsung, and Micron -- are working to rapidly increase their production capacity, to do so, they need extreme ultraviolet (EUV) lithography machines -- the same ones that processor chip foundries need to make advanced logic chips such as graphics processing units (GPUs). Those are in limited supply. ASML is the only company in the world with this technology, and it is increasing its capacity at about a 30% rate.
Source
Originally published at www.fool.com.