HBM Share of AI Chip Costs Rises to 63%, Making Memory the Biggest Component Expense

Epoch AI said generative-AI accelerators rely on high-bandwidth memory, or HBM, to move large volumes of data rapidly, making memory a critical component in determining compute supply and chip prices. SK hynix, Samsung and Micron are the main suppliers of HBM. Tight capacity has given the three companies greater pricing power amid the expansion of AI infrastructure.

Epoch AI data showed that HBM’s share of AI chip component costs rose from 52% in early 2024 to 63% recently, an increase of 11 percentage points in about a year and a half and close to two-thirds of the total. As tight supply drives up prices, cloud providers including Microsoft are increasing capital spending in an effort to ease pressure from memory’s emergence as an AI hardware bottleneck.