MediaTek Faces Pressure as AI-Driven HBM Demand Reduces DDR5 Production Capacity and Tightens Wafer Supply

The surging demand for high-bandwidth memory (HBM) associated with artificial intelligence applications is resonating throughout the global semiconductor landscape. This surge is straining wafer foundry capacities and adversely affecting the availability of Dynamic Random-Access Memory (DRAM), which is crucial for smartphones’ System on Chips (SoCs), particularly DDR5. As a result, MediaTek appears poised to be one of the first major SoC manufacturers to experience significant impacts.

LPDDR5x Delivery Timeline Extends to 26 to 39 Weeks, Affecting Mid-2026 Orders

Smartphone memory chip prices are rising and lead times for LPDDR5x are now 26-39 weeks, meaning orders placed now won’t be delivered until mid-2026, media report, adding tight foundry production lines are also squeezing global smartphone chip giants like MediaTek and Qualcomm.…

— Dan Nystedt (@dnystedt) October 27, 2025

According to reports from Taiwan’s Commercial Times, the escalating demand for HBM is impacting smartphone SoC manufacturers in two significant ways:

The production capacity for DDR5 is dwindling, resulting in delivery times stretching between 26 and 39 weeks.
The demand for HBM is tightening wafer availability, particularly as the die size of HBM is notably 35% to 45% larger than that of comparable DRAM.

This situation is likely to adversely impact MediaTek’s gross profit margins, especially as the company transitions to the 2nm process node amid reports that TSMC is charging up to $30, 000 for a single 2nm wafer. According to industry projections, MediaTek may start feeling pressure on its gross margins as early as the fourth quarter of 2025, forcing the company to consider price increases.

Conversely, Qualcomm, which already markets premium-priced products, may navigate these challenges more effectively.

Additionally, both MediaTek and Qualcomm are not expected to pivot to Samsung Foundry for their production needs, given that they have likely finalized the designs for their chips slated for release in 2026. Thus, it is anticipated that Samsung’s 2nm Gate-All-Around (GAA) technology will only begin attracting significant orders from 2027 onward.

Moreover, as previously highlighted, increasing memory chip costs are already impacting smartphone original equipment manufacturers (OEMs) like Xiaomi. The company’s President recently cited rising memory costs as a rationale for the price hikes of the Redmi K90 series.

Source & Images