Memory costs reach 63% of AI chip component expenses
Original: Memory has grown to nearly two-thirds of AI chip component costs
Why This Matters
Shows memory becoming the dominant cost driver in AI infrastructure scaling
High-bandwidth memory (HBM) costs grew from 52% to 63% of total AI chip component spending between Q1 2024 and Q4 2025, according to Epoch AI analysis covering Nvidia, AMD, Google, and Amazon chips weighted by production volume.
Epoch AI research shows HBM costs dominated AI chip spending growth, rising from $12 billion in 2024 to $32 billion in 2025. Logic dies remained stable at 13% of costs, while advanced packaging dropped from 19% to 15% and auxiliary components fell from 15% to 9%. Total AI chip component spending doubled from $22 billion to $52 billion year-over-year. Memory supply constraints are expected to push HBM's share even higher in 2026. Microsoft allocated $25 billion of its $190 billion FY2026 capex to higher component prices, while Meta raised 2026 capex by $10 billion citing similar cost pressures. The analysis covers four major chip designers weighted by production volumes.