Why the US is blocking China’s access to ‘high bandwidth memory’

The US government has recently expanded export controls on high bandwidth memory (HBM) chips to China, targeting crucial technology components essential for artificial intelligence applications and high-performance computing.

The basics of HBM technology: High bandwidth memory represents a significant advancement over traditional DRAM, offering superior data storage and transmission capabilities.

• HBM consists of stacked memory chips that can process and store data more efficiently than conventional memory
• These chips are vital components in graphics cards, data centers, autonomous vehicles, and AI applications
• As semiconductor expert G Dan Hutcheson explains, HBM is as essential to AI as memory is to the human brain

Strategic implications: The latest export restrictions are part of a broader US strategy to limit China’s access to advanced technology with potential military applications.

• This marks the third round of chip-related restrictions from the Biden administration in three years
• Beijing has retaliated by restricting exports of critical materials like germanium and gallium
• While the restrictions may temporarily limit China’s access to advanced HBM, experts suggest the country will eventually develop independent production capabilities

Market dynamics: The global HBM market is currently dominated by a small group of established manufacturers.

• SK Hynix leads with 50% market share, followed by Samsung at 40% and Micron at 10%
• The Korean manufacturers are expected to maintain approximately 95% market share through 2024
• Micron aims to increase its market presence to 20-25% by 2025

Technical complexity: The manufacturing process for HBM involves sophisticated engineering and precise assembly techniques.

• The total height of an HBM stack is approximately equal to six strands of hair
• Each layer must be extremely thin and precisely manufactured
• The process requires drilling precise holes for electrical connections between layers
• The complexity of manufacturing is reflected in HBM’s significantly higher price compared to conventional memory chips

Future market outlook: HBM is positioned to capture an increasing share of the memory chip market.

• HBM is expected to represent over 20% of the standard memory chip market value by 2024
• Market share could exceed 30% by 2025
• Chinese manufacturers Yangtze Memory Technologies and Changxin Memory Technologies are working to develop domestic HBM production capabilities

Strategic considerations: The competition for HBM technology highlights the growing tension between technological advancement and national security concerns in the semiconductor industry, with implications for both global supply chains and geopolitical relationships.