Micron Could Focus on General Purpose DRAM HBM
Why is general-purpose DRAM more profitable for Micron compared to HBM? Our news includes predictions for 2027 and the latest developments in the memory market.
With the increasing interest in artificial intelligence technologies, HBM (High Bandwidth Memory), a critical component for data centers and GPUs, is gaining prominence, but for manufacturers like Micron, general purpose DRAM remains the biggest source of profit.
Recent research published by UBS reveals that due to the complex structure and low throughput rates of HBM production, traditional DRAM production has a much greater impact on company profitability.
While Micron is projected to reach a gross profit margin of 95% on the general-purpose DRAM side by 2027, it is stated that focusing on HBM production capacity is putting pressure on financial results in the short term.
- The projected gross profit margin for general-purpose DRAM will reach 95% in 2027.
- HBM production leads to a sacrifice of DRAM capacity due to complex stacking processes.
- The claimed profit margin for HBM for 2027 remains in the 75% to 78% range.
- Memory manufacturers aim to maintain market dominance until 2029.
DRAM Profitability Outpaces HBM Technology
Although HBM technology provides the capacity and bandwidth required for AI inference, the production process is quite complex. It presents a laborious structure. This process, which requires stacking many DRAM dies on top of each other, reduces production efficiency while significantly increasing costs.
Allocating more DRAM resources to HBM production on the same wafer input limits total production capacity.
General purpose DRAM production supports companies’ financial statements more strongly than HBM.
According to analysts, Micron increased its margins on general purpose DRAM from 44% to 50% starting in 2025. This upward trend is expected to reach 80% at the beginning of 2026.
It is claimed that this rate will reach 95% by 2027 and remain around 93% throughout 2028. These figures indicate a success well above the expected margins of 75-78% for HBM.
Competitive Environment Influences Strategic Decisions
The intense competition from giants like SK Hynix and Samsung for next-generation technologies like HBM4 is forcing Micron to invest in this area. News of achieving 80% throughput rates in HBM4 shows that the market is rapidly changing. Micron aims to solidify its position in the HBM market by accepting short-term profit losses.
Micron plans to continue expanding in the HBM market and increase its shipments to 0.43 Exabytes by the end of 2027.
Market Dynamics Changing from 2029
Memory manufacturers are currently in a strong bargaining position with $38 billion in upfront payments. However, experts predict that this advantage will shift in favor of customers from 2029 onwards. Micron is trying to maximize its market share by optimizing its capacity in both HBM and traditional DRAM until this date.
Do you think AI-focused HBM technology could completely end the market dominance of traditional DRAM? Share your opinions with us in the comments section below.
