The HBM market that controls 45% of GPU production costs is dominated by just three companies: SK Hynix (~50% share), Samsung (~40%), and Micron (~10%). All three have their 2025-2026 production completely sold out, creating a structural chokepoint that shapes the entire AI infrastructure buildout.
HBM at $2,900 represents nearly half of Nvidia’s B200 production cost. This single component – High Bandwidth Memory – determines how many AI chips can be manufactured regardless of demand or investment. The triopoly controls the gate.
SK Hynix and Samsung raised HBM prices 30% for Q4 2025. All available capacity is pre-sold. SK Hynix announced all its chips are sold out through 2026. The shortage may persist 3-4 years according to industry analysts.
The concentration intensifies the bottleneck. Chinese memory champion CXMT reportedly plans HBM2 mass production in 2025 – but that’s three generations behind the cutting edge. The technology gap means the triopoly faces no meaningful near-term competition.
Framework Analysis
This is the AI Memory Chokepoint in its purest form. HBM isn’t ordinary memory – it requires through-silicon vias (TSVs) that enable unprecedented bandwidth of 8 TB/s for the B200. This architectural complexity means HBM consumes approximately three times the wafer capacity of standard DRAM to produce equivalent bits.
The structural problem: specialized TSV processes cannot be easily converted from standard DRAM production. New capacity takes years to build. And memory makers remain cautious about overbuilding, scarred by past boom-bust cycles that devastated returns.
Google, Amazon, Microsoft, and Meta have placed “open-ended orders” with Micron: take everything available, regardless of price. OpenAI’s Stargate project alone may require 900,000 DRAM wafers per month by 2029 – roughly 40% of current global DRAM output. The hyperscaler demand is insatiable.
Strategic Implications
The triopoly’s market position translates directly to financial results. SK Hynix reported its strongest quarterly results ever, with operating margins expanding as HBM commands substantial premiums. TrendForce forecasts the global HBM market will double in 2025.
For Nvidia, the dependency is structural. The company’s 78%+ gross margins depend partly on memory pricing dynamics it doesn’t control. If HBM prices rise faster than GPU prices, Nvidia’s margins compress – or it must pass costs to customers.
For enterprises planning AI infrastructure, the triopoly creates planning uncertainty. Memory availability, not just chip pricing, determines deployment timelines. The companies that secured supply agreements early hold strategic advantages over those scrambling for capacity.
The Deeper Pattern
Market concentration at chokepoints creates extraordinary value capture for the controlling parties. SK Hynix and Samsung – not Nvidia – may be the unexpected major beneficiaries of the AI infrastructure buildout. The picks-and-shovels wisdom applies within the semiconductor supply chain itself.
Key Takeaway
Three companies control the component that determines global AI chip production capacity. Their capacity decisions and pricing power shape the pace and economics of the entire AI buildout.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
