HBM spending in AI chips projected to reach 63% share by late 2025

High Bandwidth Memory (HBM) is expected to see a significant increase in its share of total component spending for AI chips. Projections indicate that HBM's share of spending for chips designed by companies including NVIDIA, AMD, Google, and Amazon will rise from 52% in the first quarter of 2024 to 63% by the fourth quarter of 2025.

Total component spending for these AI chips is forecasted to grow from approximately $22 billion in 2024 to $52 billion in 2025. Within this growth, HBM spending is expected to surge from roughly $12 billion to $32 billion, outpacing the growth of all other components. In contrast, the share of spending for advanced packaging is projected to decrease from 19% to 15%, while auxiliary components are expected to drop from 15% to 9%. Logic chip spending is anticipated to remain relatively stable at around 13% to 14%.

This trend is driven by tightening memory supply and rising prices. Major cloud providers are already accounting for these costs in their capital expenditure guidance; Microsoft expects approximately $25 billion of its FY2026 capital expenditure to be driven by higher component prices, while Meta has increased its 2026 capital expenditure range by $10 billion due to similar cost pressures.