TECH NEWS – Manufacturers are not developing DDR5 memory capacity as they should due to artificial intelligence.

The demand for high-bandwidth memory (HBM) related to AI is currently impacting the global semiconductor industry. This is limiting the capacity of wafer manufacturers and reducing the supply of DRAMs, which are often used in smartphone system-on-chips (SoCs), including DDR5. MediaTek is likely to be the first major SoC manufacturer affected.

According to Taiwan’s Commercial Times, the high demand for HBM is affecting smartphone SoC manufacturers in two ways. First, it is reducing DDR5 production capacity, leading to delivery times of 26–39 weeks. The HBM factor is also limiting available wafer capacity, especially since HBM die sizes are 35%–45% larger than those of similar DRAMs. As a result, MediaTek’s gross profit is expected to be seriously impacted by these dynamics, particularly since the company is preparing to switch to a 2-nm node while TSMC reportedly charges $30,000 for a 2-nm wafer.

MediaTek will face gross margin pressure as early as the fourth quarter of 2025. Consequently, SoC designers may have no choice but to raise prices. Qualcomm, whose products are already relatively expensive, may be better able to weather this storm. However, MediaTek and Qualcomm are unlikely to switch to Samsung Foundry because they have probably finalized their 2026 chip designs. Thus, Samsung’s 2-nm GAA process will likely only attract significant orders in 2027.

Meanwhile, the rising cost of memory chips is already affecting smartphone manufacturers, such as Xiaomi. Last week, the company’s president addressed this issue when justifying the price increase for the Redmi K90 series. Add to that the fact that DRAM prices are also rising, and we can expect price increases for desktop memory and SSDs. These components will not escape the price hike either, especially since manufacturers complained about a lack of demand a year ago.

Source: WCCFTech, CTEE