SK Group chief warns 2027 will be worst year for AI memory shortage

SK Group Chairman Chey Tae-won has warned that the global semiconductor industry faces a severe supply-demand imbalance in 2027, describing the race to secure artificial intelligence memory as "like a war" in a wide-ranging CNBC interview broadcast on August 13.kedglobal+1

Chey, who oversees more than 100 SK subsidiaries including SK Hynix ↗ 0.36%, said customer demand for memory chips has doubled this year and that no memory company will be ready to scale production fast enough to meet requirements next year. "Next year will likely be the hardest, as no memory companies are yet ready to scale up, yet demand continues to rise," he said.kucoin

Chip Inflation Hits Consumer Products

The chairman acknowledged that memory prices have already risen 40% to 50%, forcing companies such as Apple ↗ 0.22% to raise prices on flagship products. He termed the phenomenon "chip inflation" and said he has no short-term fix. "Chips are too expensive, forcing even Apple to raise prices, which in turn pushes up prices across the entire economy. This isn't good, and I don't want it to happen—but it has, and I don't have a short-term solution," Chey told CNBC's Katie Tarasov.kucoin

SK Hynix is pursuing a $720 billion expansion plan to triple production capacity by 2034, but Chey conceded that even doubling capacity within five years "isn't enough for most customers."youtube+1

A Structural Shift in Demand

Chey argued the AI era has fundamentally altered the demand logic for memory chips. Unlike the old model, in which demand was capped by "one device per person," AI agents will multiply memory requirements by an order of magnitude. "In the AI era, you'll have ten different AI agents working for you, and each agent requires more memory," he said.kucoin

He described his relationship with Nvidia ↘ 0.06% — now SK Hynix's largest customer — as collaborative and mutually dependent with TSMC Taiwan Semiconductor Manufacturing Company Limited ↘ 0.96%, noting that GPUs are "useless without sufficient HBM."kucoin

Overseas Expansion Under Consideration

Chey said SK Hynix is evaluating sites for overseas memory fabs, including in the United States, where the company is already building a $3.9 billion advanced packaging plant in Indiana. He noted that relocating the 600 to 700 supplier companies that support a memory fab is the principal challenge, and that he has not yet held direct talks with U.S. government officials. "The customer wants us to build a factory in the U.S., and I'm willing to do it, but I'm still looking for the right location," he said.kedglobal+1