RAM manufacturer: Memory crisis has not yet reached its worst point

South Korean memory chip manufacturer SK Hynix expects a continued shortage of memory chips in the coming years. The worst point in the current crisis has not even been reached yet.

2027 will be the most difficult year

Company boss Kwak Noh-jung told the news agency Reuters 2027 is expected to be the most difficult year in terms of supply, as global demand will significantly exceed the industry’s production capacities. According to the manager’s assessment, this imbalance is likely to continue even beyond 2030, despite extensive investments in expanding production. Kwak based the forecast on the unbroken demand of customers, which is growing faster than the company’s production capabilities. Although SK Hynix is ​​working intensively on creating additional capacity, it is encountering limits.

The statements were made on the day of SK Hynix’s stock market debut on the US technology exchange Nasdaq. The shares there temporarily rose by more than 13 percent. The company is now one of the most important suppliers to the AI ​​industry. The decisive factor for this is the leading role in high-bandwidth memory chips (HBM), which are used, among other things, in Nvidia’s AI accelerators.

In addition to expanding the existing plants in South Korea, SK Hynix is ​​examining additional production locations abroad. According to Kwak, the USA, Japan and countries in Southeast Asia are eligible. Sufficient available space, a stable supply of electricity and water as well as qualified workers at competitive costs are crucial. However, a final location decision has not yet been made.

Scarcity pays off

In South Korea, SK Hynix is ​​participating together with Samsung Electronics in a government program that is intended to significantly increase the national production capacity for memory chips within five years. At the same time, the company is investing around four billion dollars in a plant for modern chip packaging in the state of Indiana. Another ten billion dollars should flow into building an AI business. Doubts recently arose in the financial markets as to whether the investment boom in artificial intelligence could have reached its peak. However, industry representatives contradict this assessment.

Nvidia boss Jensen Huang also expects that memory chips for AI applications will remain in short supply for several years. Analysts at UBS also expect the DRAM market to be undersupplied at least until mid-2028. The AI ​​boom has so far paid off for SK Hynix. After a record operating profit last year, analysts are expecting another strong increase for the current quarter. Despite recent price losses, the company’s market value has multiplied over the past twelve months.