The global memory-chip shortage could become more severe in 2027 and continue beyond 2030, according to SK Hynix CEO Kwak Noh-jung.
Kwak told Reuters that next year could be the worst in the memory industry’s history from a supply perspective. He said customer demand continues to rise while the company faces limits on how quickly it can expand production.
SK Hynix expects customer demand to remain higher than its production capacity even after 2030, despite investing heavily in new factories and equipment.
The warning is particularly important because SK Hynix is one of the world’s largest memory manufacturers and a leading supplier of high-bandwidth memory, or HBM, used in Nvidia’s AI accelerators.
UBS separately expects the global DRAM market to remain undersupplied until at least the second quarter of 2028. Nvidia CEO Jensen Huang has also warned that shortages of memory used in AI systems could continue for several years.
The rapid construction of AI data centres has sharply increased demand for HBM, DRAM, and storage products.
HBM is more profitable than conventional memory and is essential for training and running large AI models. Memory manufacturers are therefore allocating more production capacity to high-end chips used by Nvidia and other AI hardware companies.
This shift can reduce the capacity available for mainstream products such as DDR4 and DDR5 computer memory, smartphone RAM, and NAND flash used in SSDs.
As a result, continued shortages could keep component prices high and increase manufacturing costs for PCs, smartphones, gaming consoles, and other consumer electronics.
Large technology companies are increasingly signing multi-year agreements to secure memory supplies before additional shortages emerge.
Some agreements use “take-or-pay” terms, which require customers to pay for committed quantities even when they no longer need all the chips. Other deals include advance deposits and financial guarantees.
These agreements provide manufacturers with more predictable revenue but can make it harder for smaller PC and electronics companies to secure affordable memory.
SK Hynix is expanding production in South Korea through facilities in Icheon, Cheongju, and Yongin.
It is also considering additional wafer fabrication plants in the United States, Japan, and Southeast Asia. However, Kwak said the company has not made a final decision.
SK Hynix will prioritise locations offering sufficient land, electricity, water, skilled workers, and competitive production costs.
The company is already investing around $4 billion in an advanced chip-packaging facility in Indiana. It is also committing $10 billion to an American AI solutions business.
SK Hynix and Samsung are participating in a South Korean government plan to double the country’s memory-chip production capacity within five years.
The two companies are each expected to build two large fabrication sites in southwestern South Korea as part of an 800 trillion won semiconductor project.
However, new semiconductor factories require several years to construct, equip and qualify. This means the additional capacity will not immediately solve the current shortage.
Micron is also accelerating its production expansion.
The American chipmaker has increased its planned US investment to more than $250 billion through 2035. The company aims to eventually produce 40% of its DRAM in the United States.
Micron expects its first new Idaho factory to begin producing wafers in mid-2027, followed by a second facility in late 2028. Construction has also started at its major New York manufacturing site.
The warning suggests that consumers and manufacturers may face further memory price increases before new production capacity becomes available.
However, the long-term outlook remains uncertain. Memory prices have historically moved through sharp boom-and-bust cycles, and some analysts believe prices could decline substantially after new factories begin production.
For now, SK Hynix expects growing AI demand to continue exceeding the industry’s ability to supply enough memory, making 2027 potentially the most difficult year of the shortage.
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