Significant growth is anticipated in the HBM sector over the next few years. According to Morgan Stanley forecasts, HBM revenues could surge from $57.3 billion in 2026 to $264.5 billion by 2028. In other words, we are looking at the market more than quadrupling in dollar terms in just two years.
A key point here is that this growth will not stem solely from higher sales volumes. Prices per gigabyte are expected to rise as the industry transitions from HBM3E to HBM4 and HBM4E. Essentially, volume is expanding while the product mix simultaneously shifts toward next-generation memory products that command higher prices and margins.
The primary driver behind this is, once again, AI infrastructure. As the performance of next-generation GPUs and accelerators improves, the demand for memory bandwidth grows rapidly. With the increasing number of GPUs in data centers, HBM is evolving from a standard peripheral memory component into one of the most critical elements of AI infrastructure.
In my view, this is the aspect of the memory sector that warrants the most attention. AI investments are generating demand not only for Nvidia, AMD, and data center operators but also for massive capacity across the HBM, DRAM, NAND, and storage sectors. In particular, since HBM production consumes more wafer capacity than standard DRAM, the continued growth of AI demand could tighten the supply of traditional DRAM.
Consequently, for manufacturers like Micron, the narrative extends beyond mere HBM revenue growth. As HBM production absorbs capacity, the supply-demand balance in the DRAM market could also shift in favor of manufacturers. If the figures projected by Morgan Stanley are approached, the memory sector could emerge as one of the biggest beneficiaries of AI hardware investments during the 2027–2028 period.
In short, when it comes to AI, looking solely at GPU demand is no longer sufficient. It is also necessary to consider the amount of HBM required alongside GPUs, the price trajectory of next-generation HBM, and the impact on total DRAM capacity—as this is precisely where a major supply crunch could arise in the coming years.
