TSMC Denies Exploring 3D DRAM Production for Nvidia

TSMC has denied a report stating that it is exploring 3D DRAM production at the request of Nvidia. The company stated that it remains a dedicated logic foundry.

A report from The Information stated that TSMC had begun preparing manufacturing plans for 3D DRAM after a request from Nvidia, which is its largest customer. The initiative was reportedly overseen by Hsu Kuo-chin, who is a TSMC vice president responsible for advanced packaging and a former head of Micron's Taiwanese operations. The report noted that soaring demand for artificial intelligence hardware has strained global memory supplies and raised prices.

In response to the report, a TSMC spokesperson stated that the company focuses at all times on its core business as a dedicated integrated circuit foundry. The spokesperson added that the company's mission is to remain a trusted technology and capacity provider for the global logic integrated circuit industry.

While TSMC works closely with memory makers by packaging memory into system-in-packages for customers, it currently lacks the production capacity and expertise to manufacture DRAM. Major memory makers are still years away from bringing 3D DRAM to market. Micron, Samsung, and SK hynix are working on 3D DRAM projects, but Micron plans to use at least four more planar DRAM process technologies before 3D memory becomes a reality.

Conventional DRAM places memory cells in a single plane, while 3D DRAM stacks multiple levels of memory cells vertically to increase capacity per wafer. Building 3D DRAM requires completely different fabrication techniques to construct multiple memory layers while controlling defects and keeping yields acceptable. Developing these techniques requires a competitive planar DRAM process technology, which TSMC does not possess.

Entering the DRAM market would expose TSMC to substantial market risks, such as capacity expansions that lead to oversupply and lower prices. It could also complicate relationships with major memory makers like SK hynix, which partnered with TSMC in 2024 to manufacture logic base dies for next-generation high-bandwidth memory. Furthermore, combining dominant logic manufacturing, advanced packaging, and memory production could raise antitrust questions for regulators.

TSMC does not need to manufacture DRAM to benefit from the demand for advanced memory. The company can instead produce sophisticated logic base dies for high-bandwidth memory, integrate memory with processors using hybrid bonding technology, and develop customized memory solutions with partners. This approach allows TSMC to expand its role in the advanced memory market without investing billions of dollars to develop DRAM manufacturing processes from scratch.

Summary

As artificial intelligence hardware creates massive demand for memory, reports have suggested that major chipmakers might expand into new manufacturing areas. TSMC's denial clarifies that it plans to stick to its core logic manufacturing business rather than attempting to build complex 3D memory technology that remains years away from market viability.