Samsung Shifted Memory Production to Prioritize HBM
The manufacturer has outsourced conventional module assembly to free up internal capacity for high-bandwidth memory.
Updated on Sept. 20, 2026 in Semiconductors
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Samsung has begun outsourcing the assembly of DDR5 memory modules and SSDs to partners in Vietnam, India, and the Philippines. This strategic pivot aims to reallocate internal production capacity at its Cheonan and Onyang facilities toward high-bandwidth memory (HBM) and advanced packaging.
Why it matters
Rising demand for AI hardware is consuming the DRAM wafers and cleanroom space necessary for both conventional and specialized memory. By moving standard module assembly externally, Samsung seeks to overcome capacity constraints that threaten to limit its HBM production growth.
TrendForce reports that HBM will represent 9% of total DRAM bit supply in 2026, climbing to 13% by 2027. Despite the surge in AI demand, DDR5 64GB RDIMM per-wafer revenue outpaced HBM during the first quarter of 2026.
The players
Samsung
A global leader in semiconductor fabrication and memory production that is currently retooling its back-end infrastructure to scale HBM manufacturing.
SK Hynix
A major DRAM competitor that specializes in high-bandwidth memory and has warned of widespread supply shortages in the memory sector through 2027.
TrendForce
A market intelligence firm specializing in semiconductor, display, and memory industry tracking and long-term supply projections.
The details
Samsung is reassigning factory space and equipment at its Cheonan and Onyang facilities to accommodate advanced packaging lines, which are necessary for the stacking and interconnect processes required for HBM. These specialized memory chips require complex 3D-stacking architectures—a method of vertically connecting multiple silicon dies into a single package—to meet the bandwidth requirements of modern AI processors. External partners will now manage the assembly of standard DDR5 modules and SSDs, which do not require these proprietary stacking techniques.
Timeline
Q1 2026: DDR5 module profitability surpassed HBM during this period.
June 2026: Samsung publicly disclosed its long-term semiconductor investment plans.
July 2026: The SK Hynix CEO warned the industry of a potential major supply shortage in 2027.
End of 2026: HBM wafer input is estimated to reach 22% of total DRAM.
2027: Analysts expect DRAM supply to remain constrained throughout the year.
The Tech Race
Samsung is positioning its manufacturing stack to compete directly with SK Hynix in the rapidly growing AI memory market. This strategic reallocation of floor space aligns with broader industry forecasts suggesting a sustained supply crunch for high-performance memory chips through 2027.
While consumers will not see immediate product changes, this shift reflects the broader industry struggle to balance memory supply across high-margin AI servers and consumer devices like handsets. With memory representing 60% of the cost for $400 devices and smartphone shipments projected to fall 13.9% in 2026, component availability for consumer electronics may face ongoing price volatility.
The takeaway
The race to secure AI-driven market share is forcing major manufacturers to outsource legacy production to maintain competitiveness. Watch for 2027 supply figures, as analysts warn that existing capacity may be insufficient to prevent a broader industry shortage.
Further reading
For more on the current industry landscape, visit the Semiconductors section.
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