SK Hynix and Micron to Potentially End DDR4/DDR3 Production, Shifting Focus to More Profitable DDR5 and HBM

 The DRAM industry appears to be on the cusp of a significant transformation. Sources suggest that the production of mature DRAM solutions may gradually decrease as major memory manufacturers increasingly prioritize high-performance chip development.

This shift reportedly involves industry giants Samsung Electronics, SK Hynix, and Micron. These South Korean manufacturers are expected to concentrate their efforts on the more lucrative DDR5 and High Bandwidth Memory (HBM) product lines in the foreseeable future.

Cessation of production for DDR4 and DDR3 memory, among others, could have substantial repercussions for downstream markets and end consumers. As the supply of these established products diminishes, prices are likely to rise. Conversely, the transition to DDR5 memory for OEMs and end-users will also necessitate higher expenditures.

Essentially, this strategic realignment can be viewed as a form of calculated market influence. For memory chip manufacturers like Samsung Electronics, High Bandwidth Memory (HBM) products, particularly those tailored for servers and artificial intelligence applications, command greater demand and offer significantly higher profit margins.

Samsung Electronics, SK Hynix, and Micron collectively dominate a substantial portion of the memory chip market. ¹ These strategic adjustments are therefore poised to impact pricing dynamics. However, it is anticipated that other manufacturers may step in to fill the supply void by late 2025.

Nan Ya Technology has indicated that pricing strategies will need to adapt to these evolving market conditions. The DRAM market is projected to experience continued contraction throughout the first half of 2025. However, with demand still on an upward trajectory, a return to equilibrium may occur relatively swiftly.

Following the advent of DDR5 memory, the prices of mature products like DDR4 and DDR3 have been steadily declining. However, the strategic pivot by these Korean manufacturers towards DDR5 and HBM may reverse this trend, potentially driving up the prices of DDR4 and DDR3 memory. Analysts at inSpectrum note that despite currently soft demand for DDR5, its prices are nonetheless trending upwards.

Winbond Electronics is reportedly planning to transition to a new 16nm process in the latter half of 2025 for the production of 8Gb DDR chips. Currently, Winbond utilizes a 20nm process primarily for manufacturing 4Gb DDR chips within the DDR3 and DDR4 categories.