Memory chip shortage to persist until 2030, warns SK Group Chairman

Global semiconductor supply constraints are expected to continue for several years, as wafer shortages and surging demand for AI-driven memory chips push up prices and impact production of consumer devices like PCs and smartphones.

The global shortage of memory chips is set to continue for the next four to five years, according to Chey Tae-won, chairman of SK Group. Speaking at Nvidia GTC in San Jose, Chey highlighted that wafer supply across the semiconductor industry remains more than 20% below demand, delaying efforts to stabilize production.

Chey noted that while major memory manufacturers are expanding capacity, the long lead time required to secure additional wafers—typically four to five years—means supply is unlikely to fully catch up with demand until around 2030. The imbalance is being further intensified by the rapid growth of artificial intelligence workloads, which are driving increased demand for advanced memory technologies.

Shift to AI memory raises concerns

A significant portion of industry investment has shifted toward high-bandwidth memory (HBM), a critical component used in AI accelerators. Companies such as SK Hynix, Samsung Electronics, and Micron Technology have prioritized HBM production due to its higher margins.

However, Chey cautioned that this strategic pivot could result in shortages of conventional DRAM, widely used in smartphones and personal computers. Reduced output of standard DRAM has already contributed to sharp price increases in consumer electronics, creating ripple effects across global markets.

Expansion plans amid rising costs

To address growing demand, SK Hynix is investing heavily in infrastructure, including a $13 billion HBM packaging and testing facility in Cheongju, South Korea, expected to be completed by 2027. Meanwhile, Samsung is expanding its DRAM production at its Pyeongtaek campus, with new capacity projected to come online by 2028. Micron is also planning a $9.6 billion HBM facility in Hiroshima, though production is unlikely to begin before 2028.

Despite these investments, most new capital expenditure is being directed toward HBM, leaving limited room to expand traditional DRAM capacity. Chey indicated that SK Hynix is preparing measures to stabilize DRAM prices, with further details expected from CEO Kwak Noh-jung in the near future.

Market research firm Gartner has projected a sharp rise in memory prices, estimating a 130% increase in DRAM and SSD costs by the end of 2026. This is expected to reduce global shipments of PCs and smartphones while extending device replacement cycles, particularly impacting entry-level markets.