Shortage of the HBM chips: what consequences are expected for the data centers

The supply chain of the tech hardware has only recently fully recovered from the consequences of the COVID on the industry. Everything with the supply chain seemed stable, but now information appeared about some issues with the supply of GPUs in the data centers.

In May of this year, a huge memory manufacturer SK Hynix announced the shortage of the HBM, mainly because their products are already sold out till 2025. One more company, Micron also shared some similar issues. Now, we are waiting for Samsung to react to the current situation and their product availability.

Because of the huge interest in AI, the shortage of HBM can become a serious trouble for a variety of digital services. Increased demand for HBM can significantly influence the future progress and plans within the industry.

Why are HBM chips so important for data centers?

This type of memory is used in the GPU package where these chips are physically next to the GPU silicon. When compared with other approaches, this one guarantees minimal latency and better speed which is needed for the AI.

When prognosticating the consequences that can occur, let’s discuss similar issues. During the COVID-19 shortage of chips for vehicles, the cars were built without them. However, that is a rough comparison, because GPU vendors don’t have such an option just to exclude this part. Without HBM, GPUs cannot be even assembled.

There are some predictions that HBM’s share in the market will double from the previous year and reach 5 percent. In 2025 this percentage may grow even further and reach 10 percent in the memory market.

The growth of the data center continues and memory shortage can cause issues

HBM is more expensive, difficult to make, and takes more time for the manufacturers to produce. That’s why, companies that make memory could not just switch to HBM production.

Of course, the shortage of the products for the data center will significantly influence the future perspectives, but right now there are no specific issues with the supply chain. Even the construction of the data center continues despite some future prognoses.  

Experts think that there won’t be drastic changes in the data center construction. The only obvious issues will be connected with the long-term supply chain. There are no serious concerns right now, but you never know.

In case of a real shortage in memory, those companies that will decide to pay extra can become the first to get the shipments. Others will be just waiting for their turn and it is not a new approach in such circumstances.

Only big companies will survive

The real trouble will be experienced by the new companies that decide to enter the same market. The biggest share of the HBM will be received by AMD and other firms that have already made an order for this product.

Among the companies that can be impacted by the shortage are SambaNova and the versal line of FPGA in AMD. All the other new companies that decided to enter this niche won’t get HBM, just because there are so many competitors already.  

Broader challenges of the data centers

The data centers that are now under construction will for sure notice some troubles with the NBM shortage, but it won’t be the most impactful thing. The major challenges for the data centers will be connected with real estate, cooling, and power.

There will be a certain point when there won’t be any huge shortage and every center will be properly equipped with no need for more products.