Memory has grown to nearly two-thirds of AI chip component costs

High-bandwidth memory (HBM) has increased from 52% to 63% of total AI chip component costs between Q1 2024 and Q4 2025, growing in absolute terms from $12 billion to $32 billion annually across chips designed by Nvidia, AMD, Google, and Amazon. Meanwhile, advanced packaging and auxiliary components declined as shares of total spending, while logic dies remained relatively flat at around 13%. Memory costs are expected to rise further in 2026 due to continued supply constraints, prompting major hyperscalers like Microsoft and Meta to increase their capital expenditure budgets significantly.