TSMC denies exploring 3D DRAM at Nvidia's request

A recent report said TSMC is exploring 3D DRAM production at Nvidia's request as AI demand strains global DRAM supplies and raises prices. TSMC denied the report, saying it is a pure-play logic foundry and plans to remain one. Even if such a plan exists, 3D DRAM is years away from market viability.

What the report says

The Information reported that TSMC has begun preparing plans for 3D DRAM manufacturing after a request from Nvidia, its largest customer. Two people familiar with the initiative were cited. The effort is reportedly overseen by Hsu Kuo-chin, TSMC's vice president for advanced packaging and former head of Micron's Taiwanese operations. The report also said the plan could create a new business for TSMC and expand its role in the AI supply chain, though memory is prone to cyclical risks.

TSMC's response

TSMC said it focuses on its core business, dedicated IC foundry, and aims to be the trusted technology and capacity provider of the global logic IC industry. A spokesperson told Tom's Hardware that TSMC is a pure-play logic foundry and plans to remain a logic foundry. The company works closely with DRAM producers when it packages memory into system-in-packages for customers, but it lacks the expertise and production capacity to make DRAM, let alone 3D DRAM.

Why 3D DRAM is still distant

Unlike conventional DRAM, which arranges memory cells in a single plane, 3D DRAM places multiple levels of memory cells vertically to increase capacity per wafer. All three leading DRAM makers, Micron, Samsung, and SK hynix, are working on 3D DRAM. Micron's DRAM strategy includes at least four more planar DRAM process technologies before 3D DRAM becomes a reality. TSMC has strong logic process technologies, but DRAM production requires entirely different manufacturing processes. Developing 3D DRAM also requires fabrication techniques for multiple memory-cell layers while controlling defects and maintaining acceptable yields. It is hardly possible to develop a 3D DRAM process without a competitive planar DRAM process, which TSMC does not have. Even for major memory makers, 3D DRAM is years away, so pursuing it cannot solve memory shortages for at least five years.

Risks and alternatives

Entering DRAM manufacturing would expose TSMC to market risks. Memory shortages often encourage capacity expansions that later create oversupply, depressing prices and profitability. It could also complicate TSMC's relationship with large DRAM makers, especially SK Hynix, which partnered with the foundry in 2024 to manufacture logic base dies for next-generation HBM products. TSMC's potential entry could raise antitrust questions if it combines leading-edge logic manufacturing, advanced chip packaging, and ramping memory production. Regulators could examine whether vertical integration would let TSMC favor its own memory products or disadvantage competitors. At the same time, another supplier could strengthen competition in a market dominated by three manufacturers. TSMC could also avoid building DRAM by producing sophisticated logic base dies for HBM, integrating memory with processors using SoIC hybrid bonding technology, and developing customized memory solutions with partners such as GUC and established DRAM manufacturers. This approach could expand its presence in advanced memory without investing billions in DRAM process development or building additional fabs for tens of billions of dollars.

Sources: Tom's Hardware