September 14, "Science and Technology Innovation Board Daily": It seems that the shortage of HBM capacity has not been gone for long, and now the expectation of excess capacity has come.

Recently, Exane BNP Paribas, the securities department of French bank BNP Paribas, has significantly downgraded Micron's rating from 'Outperform' to 'Underperform', and directly slashed the target price from $140 to $67. The reason is the concern about the excess capacity of HBM and its impact on the pricing of traditional DRAM.

The bank pointed out that due to the excess supply of HBM, the correction speed of DRAM prices is faster than expected, which may lead to a broader decline in the DRAM market.

It is expected that by the end of 2025, HBM capacity will greatly exceed demand, which will further suppress prices: by the end of 2024, HBM's installed wafer production capacity has reached 0.315 million wafers, and by 2025, it will reach about 0.4 million wafers - while demand for the same period is 0.168 million wafers, even less than half of the supply.

Exane BNP Paribas further pointed out that by 2025, Micron's performance will lag behind other AI semiconductor manufacturers, mainly due to the excess supply of HBM, which has pushed down the average selling price of Micron's memory chips; and if the price of Micron's memory chips does indeed drop as a result, the stock price may even fall below the target price of $67.

Previously, both SK Hynix and Micron mentioned that HBM capacity for 2024 has been fully sold out, and capacity for 2025 has been largely allocated; SK Hynix also said that order visibility can extend to the first quarter of 2026.

In June, a research report by Huafu Securities pointed out that according to calculations, HBM demand is expected to double by 2024 and 2025, and demand in 2025 is expected to reach 2.08 billion GB, with the overall market size reaching 31.1 billion dollars. Taking into account the time difference between HBM and GPU shipments and the establishment of GPU manufacturers' HBM inventory, even if the original manufacturers expand production on a large scale, HBM will still be in short supply in the future. Based on this, in Q2 of this year, the original manufacturers have already negotiated prices for HBM in 2025, with a preliminary price increase of 5-10%.

It is worth mentioning that as one of the main customers of HBM, the demand for NVIDIA's GPUs will also to a certain extent affect the demand for HBM.

This week, Huang Renxun has already sent out a "reassuring message". He said at the Goldman Sachs technology conference, "(demand for popular chip products) is too strong, everyone wants to be the first to get it, everyone wants to place the most orders." He added that there is strong demand from customers for the latest generation Blackwell chips, "it is indeed very tight, we are trying our best."

Overall, Exane BNP Paribas seems to be the first institution to issue a warning of "HBM oversupply" under the current circumstances.

But it must be admitted that the semiconductor industry is highly cyclical, and after the rising cycle of "surging demand, shortage and price increase, investment and expansion", there is often a declining cycle of "shrinking demand, oversupply, and price decline", from which HBM is also difficult to break free. Now that the first warning has been sounded, is the reversal really imminent? Investors are waiting for an answer.