TrendForce says that as of 2Q25, HBM3e still commanded a price premium more than four times that of DDR5, so it’s hard to fault the memory manufacturers for wanting to make a buck. However, as DDR5 prices continue to rise, the gap between the two is projected to narrow significantly in 2026, and DDR5 profitability could surpass that of HBM3e starting in the first quarter of next year, TrendForce stated.
The seven hyperscalers Objective Analysis tracks used to spend an average of 12-15% of their revenues on “PPE”: property, plant, and equipment. Over the past six quarters that share has zoomed to over 25%, which means that they are spending on equipment without getting any return, basically betting that the market for AI will grow to justify their investment.
“A company can only do that for so long before it exhausts its bank account, but it’s more rational to anticipate that investors will pressure management into changes before that point is reached. It comes down to a question of the investors’ appetite for risk,” said Handy.
