(June 2): SK Hynix Inc plans to double its memory chip capacity over the coming half-decade, a major expansion that should help ease a global shortage of an essential component of artificial intelligence (AI).
The company is responding to an endemic deficit of storage chips that could last till 2030, chairman Chey Tae-won told reporters in Taipei, upholding a previous estimate. SK Hynix is ramping up spending to address that demand-supply imbalance though it is hard to quantify because of volatile prices for a panoply of resources including land, equipment and electricity, Chey said. SK Hynix will do whatever it requires to fund that expansion in chip wafer capacity, he added.
“Whatever we need, we will provide it,” he said. “Until 2030, there’s still some shortage.”
SK Hynix, which with Samsung Electronics Co and Micron Technology Inc dominates the global market for memory, is one of the biggest beneficiaries of a global data centre buildout. Trillions of dollars in projected spending by hyperscalers like Meta Platforms Inc sent SK Hynix’s and Micron’s market valuations past the US$1 trillion ($1.28 trillion) mark for the first time last week.
Memory chips, used to store and funnel the large amounts of data required for AI services, have become one of the biggest bottlenecks to AI development. Investors and analysts expect memory shortages to last through 2027, giving its producers unusual pricing power over the world’s largest technology companies.
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Some industry executives have declared a “super-cycle” of exponential demand for memory, from the high-bandwidth or HBM variety required to train AI such as ChatGPT to more conventional DRAM and Nand flash employed across data centres. That is helping the industry break a decades-long cycle of boom-and-bust, as well as propel South Korea’s economy.
On Tuesday, Arm Holdings plc chief executive officer Rene Haas said memory remained the biggest bottleneck for the global AI industry, in part because the sector leaders had pulled back on expansion during the post-Covid downturn of a few years ago. More generally, the memory industry remains wary of over-expanding and precipitating another market collapse.
Chey said that the lead time for setting up a new site was long, with a greenfield project potentially requiring more than five years.
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SK Hynix’s capital expenditure in 2026 will rise significantly from 30.2 trillion won in 2025, executives have said previously without elaborating. The company has filed to list American depositary receipts this year. If that pans out, it would rank among the biggest New York debuts by a foreign company, giving American investors another way to play the AI memory trade.
Uploaded by Tham Yek Lee
