(March 17): A global shortage of memory chips is likely to persist another four to five years because of endemic constraints in semiconductor production, the head of South Korean conglomerate SK Group said.
Leading players such as SK Hynix Inc are expanding capacity but they are unlikely to fully sate demand till around 2030, said Chey Tae-won, whose company controls the chipmaker. Industry-wide, supply of the basic wafers that get made into chips are lagging demand by more than 20%, Chey told reporters on the sidelines of Nvidia Corp’s GTC event in San Jose.
SK Hynix, Samsung Electronics Co and Micron Technology Inc together dominate the supply of memory chips globally. The three have shifted production in recent years towards a specialised form of memory intended for use in Nvidia’s in-demand artificial intelligence (AI) accelerators, leading to a shortfall in output of more conventional storage.
That deficit is beginning to hammer profits, derail corporate plans and inflate price tags on everything from laptops and smartphones to cars and data centres — and many expect the crunch to worsen before it improves. SK Hynix is preparing to outline measures to help stabilise prices, Chey added, without elaborating.
SK Hynix is still considering a listing of American depositary receipts, Chey said in remarks to reporters in California provided by a company spokesperson. Such a move seen as a way to narrow the valuation gap with global peers such as Micron.
See also: OpenAI in talks for US$10 bil joint venture with private equity firms — Bloomberg
SK Hynix’s shares rose as much as 3.7% in Seoul on Tuesday. Samsung stock also climbed after Nvidia chief executive officer Jensen Huang said at the same event the Korean chipmaker will make a Groq-based AI inference processor, using its four-nanometre technology.
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