The Comeback of Commodity Memory: Surging Prices May Outpace HBM Profit Margins

Rising prices of commodity memory chips are reshaping profitability expectations in the semiconductor market, with analysts suggesting that conventional memory could soon outperform high-bandwidth memory (HBM) in operating margins.

Lee Se-chul, Managing Director at Citi Group Research, said during a television interview on Monday that commodity memory, which has historically generated lower margins than HBM, may now deliver higher profitability due to a sharp price surge. He added that this shift could act as a positive earnings driver for Samsung Electronics.

According to Lee, commodity memory prices jumped by approximately 70% in the fourth quarter of last year, with an additional increase of around 40% expected in the first quarter of this year. “Given the scale of the price increase, commodity memory could enter a phase where operating profit margins exceed those of HBM,” he said.

Lee explained that memory manufacturers had concentrated new capacity investments on HBM last year to meet strong demand tied to artificial intelligence workloads. However, faster-than-expected growth in AI inference demand has driven a surge in demand for key-value (KV) cache, which relies more heavily on conventional DRAM.

As inference workloads expand, demand has increasingly shifted from HBM toward general-purpose DRAM, and is now extending further into NAND memory, according to Lee. This demand transition has tightened supply conditions across the broader commodity memory market.

“The expansion of inference-related demand is spreading from DRAM to NAND,” Lee said, noting that the sector as a whole is entering a phase of rising demand. He added that commodity memory, long overshadowed by HBM, now warrants renewed attention from investors and the industry.

The analysis highlights how changing AI usage patterns—particularly the rapid growth of inference workloads—are altering demand dynamics within the global memory market, with potential implications for pricing, margins, and corporate earnings.