JPMorgan: HBM supply shortage to persist through 2028, prices to rise 42%
JPMorgan and Morgan Stanley have released reports countering market fears of an HBM specification downgrade, stating that total bit demand remains strong with a 63% CAGR from 2026 to 2028. The supply-demand gap will narrow only slightly from -20% to -16%, with shortages persisting through 2028. ASIC custom chips are expected to surpass Nvidia as the largest HBM buyer by 2027. HBM average selling prices are forecast to rise 42% in 2027 and 25% in 2028.
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- Summary covers the current reports
Cross-source coverage
Common ground
- HBM demand is growing rapidly at 63% CAGR through 2028, driven by AI and custom chips.
- Supply is tight now, but capacity expansion by Samsung, SK Hynix, and Micron will eventually ease the shortage.
- Advanced packaging capacity, especially CoWoS, is a real bottleneck that limits AI chip production.
- Talent shortages in HBM engineering and manufacturing are a binding constraint for everyone.
- China is investing heavily in domestic memory production and alternative technologies as a strategic move.
Points of contention
- Whether prepaying 30-40% for HBM capacity is a healthy market adaptation or a sign of a broken, concentrated system.
- Whether China can catch up in HBM technology quickly, given the decades of experience leaders have, or if its progress will be exponential like in solar and EVs.
- Whether US export controls on equipment and tools are a neutral market condition or a weaponized chokehold that causes the shortage.
- Whether building parallel supply chains is costly insurance or the only rational strategy for survival in a multipolar world.
- Whether the HBM shortage is temporary and will ease by late 2027, or is a structural problem caused by decoupling policies.
Blind spots
- Both sides underplay how talent shortages—not just money or fabs—limit HBM production and innovation globally.
- The debate focuses on HBM but ignores that advanced packaging (like CoWoS) is the real bottleneck for AI chips, and it's concentrated in Taiwan.
- Neither side fully addresses that China's export controls on gallium and germanium create reciprocal vulnerabilities for the West, making dependency mutual.
WorldAttention’s read
The HBM shortage is real and driven by surging AI demand, but it's not permanent—supply will catch up by 2028 as Samsung and Micron ramp up. The deeper issue is structural: three companies control all supply, and US export controls on equipment create a systemic chokehold on China. The debate boils down to whether this is a temporary market imbalance or a sign of a broken unipolar system. Both sides agree that advanced packaging and talent are the real bottlenecks, not HBM itself. China's push for self-reliance is costly but rational as insurance, while the West's market-driven approach is efficient but vulnerable to geopolitics. The smartest strategy is a hybrid: secure global supply through prepayment while investing in domestic alternatives. The multipolar shift is coming, not because anyone wants it, but because the current system has proven unreliable.
Reporting timeline
JPMorgan: HBM Spec Downgrade Misread, Supply Shortage to Persist, Prices to Rise 42%
According to a JPMorgan industry report cited by Fast Technology on September 24, the market's interpretation of HBM specification downgrades is incorrect. The bank states that while product mix shifts toward 8Hi economical products, total bit demand over 2026-2028 remains at 1630 billion Gb, with the supply-demand gap improving only slightly from -20% to -16%. The persistent shortage is rooted in the 'Die Penalty,' where producing equivalent HBM bits consumes 3-4 times the wafer resources of traditional DRAM. JPMorgan forecasts HBM average selling prices will rise 42% year-on-year in 2027 and 25% in 2028, reaching $3.8 per Gb. Downstream demand is shifting, with ASIC expected to surpass Nvidia as the largest HBM buyer by 2027, accounting for 48% of demand versus Nvidia's 43%. Samsung is allocating 58% of new DRAM capacity to HBM from 2025-2028, raising HBM's share of total DRAM capacity from 19% to 31%.
Read sourceHBM Memory Chip Shortage Creates Triple Shock for AI Compute Industry
This analysis from Sina Finance, citing JPMorgan and other sources, examines the severe shortage of High Bandwidth Memory (HBM) chips, which are critical for AI computing. Despite concerns over a potential downgrade in HBM specifications by Nvidia, JPMorgan forecasts a 63% compound annual growth rate for HBM bit demand from 2026 to 2028, with a cumulative demand of 163 billion Gb and persistent supply deficits of 15-22%. The shortage is driving three major industry impacts: First, HBM is transforming from a cyclical commodity into a strategic asset, consuming three times the wafer capacity of DDR5 and causing price surges in other memory types. Second, the power balance in the supply chain is shifting, with cloud companies' ASICs expected to surpass Nvidia as the largest HBM buyer by 2027, and downstream firms are directly investing in supplier capacity. Third, the competitive focus is moving from process technology to packaging and architecture, with customized HBM solutions like Samsung's ZHBM and Nvidia's NVHBM on the horizon. The article concludes that the HBM market could reach $1.5-2.8 trillion by 2028, but warns that new capacity ramp-up and sustained AI capital expenditure are key variables to watch.
Morgan Stanley: HBM Spec Downgrade Misread, Demand CAGR Still 63% from 2026 to 2028
Morgan Stanley has pushed back against market concerns over a downgrade in HBM specifications, stating that even with the downgrade, bit demand for HBM will grow at a compound annual rate of 63% from 2026 to 2028. The bank maintains that the industry will remain in a supply shortage, with prices continuing to rise, and memory stocks retaining investment value. The downgrade changes the product mix, not total demand. Morgan Stanley has revised its 2026-2027 HBM demand upward and 2028 demand downward, keeping cumulative bit demand over three years at roughly 163 billion Gb. The supply-demand deficit improves slightly from -20% to -16%, but the cumulative shortage duration lengthens, limiting manufacturers' flexibility. The core reason is a shift toward 8Hi economical products, while 16Hi technology is delayed until at least 2029. On the supply side, Samsung is increasing HBM wafer allocation. From 2025 to 2028, 58% of new DRAM capacity will go to HBM, raising HBM's share of total DRAM capacity from 19% to 31%. HBM market size is projected to reach $160-282 billion by 2027-2028, accounting for 18-24% of DRAM revenue for Samsung, SK Hynix, and Micron.
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JPMorgan: HBM Spec Downgrade Does Not Change Tight Supply; Demand Growth Remains Strong
JPMorgan released a research report on the HBM memory market, addressing concerns over potential spec downgrades. The bank argues that even with spec adjustments, HBM supply will remain tight through 2028, with bit demand compound annual growth rate of 63% from 2026 to 2028. The report raises 2026-2027 demand forecasts but lowers 2028 demand, keeping cumulative bit demand at 1630 billion Gb. Supply shortages are expected to persist, with the deficit improving slightly from -20% to -16%. Key shifts include ASIC custom chips surpassing NVIDIA as the largest HBM consumer by 2027, and HBM average selling prices rising 54% in 2027 and 25% in 2028. The bank sees investment value in the memory sector, favoring SK Hynix, with Samsung as a potential beneficiary if it increases dividends and buybacks.
Read sourceJPMorgan: HBM downgrade fears overblown, demand CAGR to stay at 63% from 2026-2028
JPMorgan has released a research report on the HBM memory industry, addressing market concerns over potential specification downgrades. The bank argues that even with a shift to lower-tier products like 8Hi, HBM supply will remain tight through 2028. It forecasts a 63% compound annual growth rate (CAGR) for HBM bit demand from 2026 to 2028, with total cumulative demand holding steady at 163 billion GB. The supply deficit is expected to improve slightly from -20% to -16% over the period. A major shift in downstream demand is predicted, with ASIC custom chips surpassing NVIDIA as the largest HBM consumer by 2027. HBM average selling prices are forecast to rise 54% in 2027 and 25% in 2028, reaching $3.8 per GB. The bank maintains a bullish view on the memory sector, citing tight supply, value from customization, and pricing resilience. It prefers SK Hynix for its shareholder return potential, while noting Samsung's investment case could improve with increased dividends and buybacks.