Xiaomo: HBM specifications downgraded without changing the scarcity undertone. The compound growth rate of demand in 2026-2028 will still reach 63%

The Zhitong Finance App learned that J.P. Morgan recently released an HBM storage industry research report to update industry supply and demand, downstream demand, technology iteration, manufacturer competition, and investment judgments in response to market concerns about HBM downgrade specifications. The bank believes that even with a reduction in specifications, HBM supply and demand will continue to be tight. The compound growth rate of HBM bit demand will reach 63% in 2026-2028, the upward price trend continues, and the storage sector has investment value.

At the supply and demand level, the report raised HBM demand from 2026-2027 and lowered demand in 2028. The total cumulative demand for bits remained unchanged at 163 billion Gb over three years. Affected by the increase in the share of 8Hi economical products and the earliest delay of 16Hi technology until 2029, the industry was always in a state of supply shortage in 2026-2028. The supply and demand shortage rate improved slightly from -20% to -16%, and the cumulative shortage period continued to rise.

The supply side mainly relies on Samsung to increase HBM wafer distribution to slightly boost supply. The HBM market is expected to reach US$160-282 billion in 2027-2028, accounting for 18-24% of the total DRAM revenue of the three major storage vendors. In terms of production capacity, 58% of the new DRAM production capacity in 2025-2028 will be invested in HBM manufacturing, and HBM's share of total DRAM production capacity will increase from 19% to 31%.

There will be an important shift in the downstream customer landscape, and ASIC self-developed chips will surpass Nvidia to become HBM's largest consumer in 2027. Nvidia is still the core buyer in 2026, accounting for 58% of total demand; however, ASIC unit shipments can grow at a year-on-year rate of 102%, far higher than Nvidia's 15%.

In 2027, the share of ASIC demand rose to 48%, and Nvidia fell back to 43%. However, Nvidia's single-chip HBM capacity is still higher than ASIC, but the capacity premium for both will gradually shrink.

On the price and profit side, the average price of HBM rose 54% year on year in 2027, continued to rise 25% in 2028, and reached 3.8 US dollars per Gb in 2028. HBM's operating profit margin remains in the 60%-70% range, lower than DRAM for servers that have signed long-term agreements, but it is a significant improvement over previous years, and prices and profit margins for non-Changxie products are expected to continue to rise until 2028.

On the technical route, the industry is becoming multi-SKU hierarchical. 8Hi has an extended life cycle as an economical product. 12Hi focuses on the high-performance market. TCB is the mainstream packaging solution at this stage, and customized HBM will become the focus of subsequent competition. Nvidia's NVHBM custom products are expected to be launched in late 2028.

In terms of the competitive pattern of manufacturers, Samsung and Micron continue to catch up with SK Hynix in terms of shares, and the combined revenue share of the two will reach 59% of HBM in 2027. Competition in a scarce environment will not suppress the average price of products. Chips developed by AI laboratories such as OpenAI and Anthropic are long-term upward demand variables that have not yet been quantified.

At the investment level, the report focuses on the storage sector. The market has partially digested the downgrade specifications. The supporting logic includes tight HBM supply and demand, increased value due to customization, and price resilience. The stock price has clearly rebounded after experiencing an earlier correction; based on shareholder return potential, priority is given to SK Hynix. If Samsung increases dividend repurchases, its investment value will further improve.