SK Hynix: Plans to Double Memory Production Capacity in Five Years, Shortage Expected to Continue Until 2030

SK Hynix has announced a large-scale expansion plan, aiming to double its wafer production capacity over the next five years to address the ongoing memory chip shortage driven by global artificial intelligence infrastructure development.

SK Group Chairman Chey Tae-won told reporters on Tuesday during the Computex conference in Taipei that the global storage chip supply gap could persist until 2030, and the company is ramping up capital expenditure efforts to bridge the supply-demand imbalance, though he did not disclose the specific investment amount. This statement reaffirms his warning earlier in March this year that the global wafer shortage could continue beyond 2030.

This expansion plan has had a significant impact on the market. Last week, SK Hynix's market value surpassed 1 trillion USD for the first time, joining the trillion-dollar club alongside Samsung Electronics and Micron Technology. Together, these three companies dominate the global memory market. Investors and analysts generally expect the memory shortage to persist until 2027, providing memory chip manufacturers with rare pricing power over the world's largest technology companies.

AI Demand is Reshaping Traditional Cyclical Industries

Memory chips are the core components for storing and transmitting vast amounts of data required to run AI services and have become one of the primary bottlenecks in AI development. The anticipated multi-trillion-dollar investment by hyperscale cloud service providers, such as Meta Platforms, in data center construction has directly propelled SK Hynix and Micron to historic highs in market value.

Goldman Sachs has raised its operating profit forecasts for SK Hynix and Samsung Electronics in 2028 by 24% and 23.3%, respectively, to 454 trillion KRW (approximately 299.6 billion USD) and 610 trillion KRW, citing the sustained demand driven by AI as the reason. Some analysts believe the AI boom is reshaping the traditionally cyclical nature of the memory industry.

SK Hynix Leads the HBM Market, Seeks Deeper Partnerships

In the key AI chip segment of high bandwidth memory (HBM), SK Hynix currently holds a dominant position. According to Counterpoint Research, in the first quarter of this year, SK Hynix captured a 58% share of the global HBM market, while Samsung and Micron each held 21%.

Chey Tae-won stated that he hopes SK Hynix can become the main HBM supplier for Nvidia's Vera Rubin system. He also noted that the company needs to expand its partnerships beyond just the world’s largest foundry, TSMC. The Computex conference brought together executives from leading global technology companies, including Nvidia, and Chey’s statements further underscore the intent to deepen partnerships with industry peers.