SK Hynix CEO Predicts Severe Memory Chip Shortage by 2027

The global memory chip industry is bracing for what could be its most severe supply shortage in 2027, according to Kwak Noh-jung, the chief executive of South Korean chipmaker SK Hynix. In an interview with Reuters, Kwak stated that next year is projected to be the industry's worst from a supply perspective, citing continuously increasing customer demand against inherent capacity limitations.

SK Hynix, a key supplier of high-bandwidth memory (HBM) essential for Nvidia's AI processors, anticipates that supply will remain constrained relative to demand even beyond 2030, despite ongoing production expansions. This outlook aligns with previous warnings from Nvidia CEO Jensen Huang, who indicated that AI memory shortages would persist for several years.

Looking ahead, Kwak revealed that the United States is among several potential locations being considered for a new wafer fabrication plant. Other sites under review include Japan and Southeast Asia. The selection criteria for any new facility will prioritize sufficient land, reliable electricity and water supply, and access to skilled labor at competitive costs.

This potential expansion follows significant U.S. investments by SK Hynix, including approximately $4 billion for an advanced packaging facility in Indiana and a $10 billion venture focused on AI solutions. Financial analysts also project a continued undersupply in the global DRAM market until at least mid-2028, with hyperscaler capital expenditure expected to surge due to AI workloads.

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We forecast that next year will be the worst year in the industry’s history from the supply perspective. Our customer demand continues to go up, while our capacity has limitations.