Nvidia’s New AI Chips Predicted to Drive Growth in Memory Chip Market
Nvidia’s recent launch of powerful new artificial intelligence chips, known as Blackwell, is expected to have a significant impact on the memory chip market used in AI systems. According to Goldman Sachs, the total addressable market for high-bandwidth memory (HBM) is projected to expand tenfold to $23 billion by 2026.
Leading memory chip manufacturers such as SK Hynix, Samsung Electronics, and Micron are anticipated to be prime beneficiaries of this booming market. Investors looking to capitalize on this growth can consider investing in these companies through exchange-traded funds like the Invesco Next Gen Connectivity ETF (KNCT) and WisdomTree Artificial Intelligence and Innovation Fund (WTAI).
The increased demand for AI is driving higher AI server shipments and greater memory chip density per GPU, as reported by Goldman Sachs. However, challenges such as larger chip sizes and lower production yields for HBM may result in tight supply in the near future.
Citi analysts also foresee sustained supply tightness in the HBM3E space. Suppliers have already reported that their HBM capacity for 2024 is fully booked, with 2025 supply being allocated to customers.
SK Hynix is expected to maintain over 50% market share in the coming years, while Samsung Electronics has the potential to gain market share in the medium term. Micron, on the other hand, may begin to outgrow its rivals by 2025 by focusing on the HBM3E standard, according to Goldman Sachs.
Overall, the launch of Nvidia’s Blackwell chips is creating a ripple effect in the memory chip market, with significant growth potential for key players in the industry.
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