Goldman Sachs raised its HBM forecast again: doubling every year for the next three years

wallstreetcn ·  May 28 23:05

Source: Wall Street News Author: Bu Shuqing

Goldman Sachs predicts that the global HBM (high-bandwidth memory chip) market will reach US$30 billion by 2026, up more than 30% from the March forecast. Hynix will maintain its dominant position in HBM3 and HBM3E for the next 2-3 years, maintaining more than 50% of the overall HBM market share.

In the context of high performance memory chips being difficult to find, Goldman Sachs raised the HBM market forecast twice in just two months.

On Monday local time, Giuni Lee and other Goldman Sachs analysts released a report predicting that the global HBM (high-bandwidth memory chip) market will grow at a compound annual growth rate of about 100% during the 2023-2026 period and reach 30 billion US dollars in 2026, up more than 30% from the March forecast.

Goldman Sachs pointed out that strong global AI-related investment is expected to drive growth in demand for HBM. Furthermore, HBM technology is developing rapidly, and the HBM capacity used in each AI chip will increase, which will also boost demand. Goldman Sachs also reiterated the view that HBM will be in short supply in the next few years.

Strong AI investment and revenue are both expected to accelerate HBM's expansion

The main reasons why Goldman Sachs raised its HBM market forecast can be summarized in the following four points:

The outlook for AI-related revenue in HBM's supply chain is even stronger.

On the supply side, Goldman Sachs raised SK Hynix's HBM revenue forecast for this year from 7.5 billion US dollars to 9 billion US dollars, and raised Samsung's HBM revenue forecast from the previous 4.8 billion US dollars to 5.2 billion US dollars.

On the demand side, Goldman Sachs expects Nvidia's data center computing revenue to continue to grow, raising the previous data center computing revenue growth rates of 112%, 31%, and 8% in 2024, 2025, and 2026 to 142%, 39%, and 18%, respectively.

Furthermore, TSMC management expects AI revenue to more than double this year, and expects AI revenue to grow at a compound annual rate of 50% by 2028.

The HBM technology roadmap has been accelerated, leading to an increase in HBM capacity in the chip. For example, Samsung and SK Hynix have announced one after another that they will begin mass production of the 12-layer HBM3E, and the latter will advance the HBM4 mass production plan from 2026 to 2025.

The increase in the share of advanced HBM3E means an increase in market demand for high-end HBMs, while tight supply also drives up the overall price of the HBM market.

According to Goldman Sachs's survey, HBM3E has a premium of at least 10-20% over HBM3. As a result, Goldman Sachs raised the average price forecast for the HBM market accordingly. It is expected that the average selling price will increase year-on-year in 2024 and 2025 (the previous forecast was that the average price will gradually decline in these two years).

Furthermore, major US hyperscale cloud vendors previously stated that although AI-related capital expenditure is already at a high level in 2024, it is expected to continue to increase in 2025. Based on this, Goldman Sachs expects AI related capital expenditure growth rates of 46% and 11% in 2024 and 2025, respectively (previously 26% and 5%).

As cloud capital expenditure expectations rise, demand for HBM as one of the main application areas will also increase.

Based on the above factors, Goldman Sachs raised HBM's total usable market size forecast for 2024, 2025, and 2026 by 16%, 24%, and 31%, respectively, to US$15 billion, US$23 billion, and US$30 billion.

Goldman Sachs reiterated the view that HBM will be in short supply in the next few years, saying that the increase in demand forecasts exceeds the slight increase in their estimates of HBM production capacity and yield.

According to Goldman Sachs's latest supply and demand analysis, the HBM market's supply gap will reach 2.7%, 1.9%, and 0.9% in 2024, 2025, and 2026, respectively, higher than the 2.0%, 1.0%, and 0.7% forecast previously.

Hynix is steadily leading the way, and Micron is growing the fastest?

Goldman Sachs's overall position on the global HBM competitive landscape remains unchanged:

SK Hynix: Goldman Sachs believes that Hynix will maintain its dominant position in HBM3 and HBM3E for the next 2-3 years, maintaining an overall HBM market share of more than 50%.

Goldman Sachs raised its estimate of Hynix's HBM revenue for 2024-2026, and expects HBM's revenue and profit to account for a large share of Hynix's total revenue and profit.

As Hynix is making good progress in increasing product yield and supplying the latest generation of HBM to major customers, Goldman Sachs raised its target price from 225,000 won to 255,000 won, maintaining the purchase rating.

Samsung: Goldman Sachs expects Samsung to maintain the largest market share among traditional HBM products (mainly HBM2E) and gradually gain share in HBM3/HBM3E.

Although Samsung's HBM gross margin may be lower than Hynix, Goldman Sachs still expects the HBM business to increase Samsung's overall profit margin.

Goldman Sachs raised Samsung's profit expectations slightly, but the overall correction was limited as higher DRAM prices may affect the profit margins of its smartphone and consumer electronics businesses. Goldman Sachs maintained Samsung's target price of 103,000 won and reaffirmed its buy rating.

Micron: Goldman Sachs expects Micron's overall HBM revenue growth rate to surpass Samsung Electronics and SK Hynix from 2025, and achieve maximum market share growth (albeit at a lower base).

Micron plans to increase capital expenditure to seize HBM market opportunities, and expects HBM's business to grow from hundreds of millions of dollars in fiscal 2024 to several billion dollars in fiscal 2025.

Micron's 8-layer stacked HBM3E has a 30% energy efficiency advantage over its peers, and Goldman Sachs, which is currently supplying Nvidia, believes these are all positive signs. Goldman Sachs anticipates that Micron's transition from the current 1-beta process node to the 1-gamma node will be the key to reducing HBM costs.


The translation is provided by third-party software.

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