TSMC weighs making 3D DRAM at Nvidia's request — a fourth memory supplier would redraw the shortage map
TSMC is considering producing 3D DRAM memory chips after a request from Nvidia, The Information reported — a move that would put the world's largest contract chipmaker into competition with Samsung, SK hynix and Micron for the first time.
The News
Taiwan Semiconductor Manufacturing Co. is considering producing 3D DRAM — memory chips that stack storage cells vertically to pack more capacity into the same space — at the request of Nvidia, The Information reported on November 6, citing two people familiar with the discussions. Reuters relayed the report, and The Next Web and Asia Daily carried matching accounts. TSMC vice president Hsu Kuo-chin, who oversees advanced packaging, is reportedly leading the assessment, weighing two routes: building a new fab — one account names Taiwan's Central Taiwan Science Park — or acquiring an existing plant and converting it for memory production.
Nothing is committed. No factory location, investment budget, wafer target, product, customer qualification or production date has been identified, and TSMC declined to comment on market rumors while restating its focus on its core foundry business. Nvidia did not respond to requests for comment. A foundry is a company that makes chips for other companies rather than selling its own — TSMC is the world's largest — and it has never sold memory chips of its own. Entering the market would put it into direct competition with Samsung, SK hynix and Micron for the first time.
The request fits a pattern. In October, Nvidia asked Samsung, SK hynix and Micron to build the base dies of its next-generation custom high-bandwidth memory — the fast memory stacked next to AI processors — on TSMC's 3-nanometre process, and the 3D DRAM exploration extends that logic-and-memory convergence. The shortage behind it is real: Micron expects memory shortages to last until 2028, and the tight supply has roughly doubled memory prices. TSMC's US-listed shares rose 6.33% to $375.44 on November 6, but that was the sector bounce, not this report — the whole chip index rose 4.21% the same day.
TSMC said it does not comment on market rumors or speculation.
Why It Matters
A fourth supplier would eventually ease the shortage that has made AI hardware more expensive to build, and it would let Nvidia diversify away from the three companies that control the memory market. That is the bearish side for the incumbents: more supply, years from now, means less pricing power. The same move is a new revenue line for TSMC in the scarcest part of the AI supply chain — the company already makes the logic chips that memory stacks onto, so adding the memory itself is a natural extension of its advanced-packaging business.
But the key word is eventually. A memory fab takes years to build, qualify and fill with volume, and no decision has even been made yet. Nothing in this report changes the 2027 supply picture: Samsung has already priced and allocated its 2027 high-bandwidth memory volumes, and SK hynix has effectively sold virtually all of its DRAM and high-bandwidth memory output through 2029. Today's memory prices are set by that scarcity, not by a fab that does not exist yet.
Analyst's Take
Our call is Mixed. The report is strategically important — if TSMC enters memory, the structure of the AI supply chain changes — but it is commercially irrelevant for years. The right way to read it is as Nvidia using its weight as TSMC's biggest customer to push for more supply, and as a long-term threat to the memory trio's pricing power rather than a near-term one. For Nvidia the stakes are practical as well as strategic: its next-generation custom high-bandwidth memory depends on base dies built on TSMC's 3-nanometre process, so the two companies' roadmaps are already intertwined — the 3D DRAM question is whether that partnership extends from logic into memory itself.
What to watch: any confirmation or denial from TSMC beyond its no-comment line, any sign of a site or investment decision, and Nvidia's earnings on November 17, where the memory shortage — and what Nvidia is doing about it — is likely to be the first question.
Are you bullish or bearish on this story?
By The Numbers
FAQ
What is 3D DRAM?
A way of building memory chips by stacking storage cells vertically inside a single chip, instead of laying them out flat. Stacking packs more memory into the same space — the same idea as high-rise buildings holding more people than single-storey ones.
What is HBM, and how is it different?
High-bandwidth memory is the fast memory stacked next to AI processors today, made by stacking separate memory chips on top of each other. 3D DRAM would stack the storage cells themselves inside one chip — a different, newer approach that is still on the roadmaps, not in production.
Why does Nvidia want a fourth memory supplier?
Memory is the scarcest part of the AI supply chain, and only three companies — Samsung, SK hynix and Micron — make it at scale. A fourth supplier would ease the shortage, give Nvidia more bargaining power, and reduce its dependence on the trio.
When could TSMC memory chips actually arrive?
Not for years, even if TSMC decides to proceed. No location, budget or production date has been identified, and a new memory fab takes years to build and qualify. Nothing in this report changes the 2027 supply picture.
What is a foundry?
A company that manufactures chips designed by other companies. TSMC is the world's largest foundry — it makes Nvidia's AI processors, for example — but it has never sold memory chips under its own name.
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Source: The Information via Reuters / AI Brief