The AI boom has pushed the storage chip industry into a rare prosperity cycle, but the two giants are actively applying the brakes.
Samsung Electronics and SK Hynix are taking a more cautious approach to their DRAM expansion plans. According to South Korean media reports, Samsung internally expects that the current storage shortage will ease around 2028, and is calibrating its investment pace accordingly to avoid repeating the mistakes of excessive expansion. Meanwhile, SK Hynix has also publicly stated multiple times that it will base its expansion on actual demand rather than optimistic expectations.
This strategy is being transmitted throughout the entire supply chain. Against the backdrop of high bandwidth memory (HBM) continuously consuming packaging and testing capacity, the effective supply of traditional DRAM is further compressed, leading to significant increases in both contract prices and spot prices. Reports indicate that the rise in DRAM costs will increase the bill of materials (BoM) for smartphones by up to 25%, with mid-range and low-end models being the most affected.
The current situation is not merely a supply gap, but rather a structural scarcity driven by profit logic—both suppliers are deliberately controlling the pace of capacity release while fully enjoying the benefits of the shortage, in order to avoid the risks of the next round of excess. For original equipment manufacturers (OEMs) and end consumers, this means that storage prices are unlikely to return to previous low levels for quite some time.
<h2>HBM is eating into traditional DRAM capacity, deepening structural contradictions</h2>
The explosive demand for AI accelerators has made HBM the most profitable product line in the storage industry. Orders from NVIDIA, AMD, and various custom ASICs continue to grow, while HBM production not only occupies wafer capacity but also heavily relies on highly specialized backend resources such as through-silicon vias (TSV) technology, stacked packaging, thermal validation, and yield management, which are far more complex than traditional PC or smartphone DRAM.
This shift in priority directly squeezes the capacity allocation for conventional DRAM. The more Samsung and SK Hynix tilt their resources towards the most profitable HBM production lines, the greater the supply pressure on the traditional DRAM segment. Cost increases are no longer limited to the server sector but are accelerating towards consumer terminals—smartphones are particularly affected, with the weight of storage costs in the overall BoM significantly rising.
<h2>Samsung anchors on 2028: Expectations of the end of the super cycle dominate investment pace</h2>
The DRAM market is currently experiencing the most severe shortage in several quarters, with contract prices seeing triple-digit increases, exceeding the historical experience range of the industry. In this context, Samsung's assessment is particularly noteworthy— the company expects that this memory super cycle, primarily driven by AI computing demand, will come to an end around 2028.
To respond to this outlook, Samsung is adjusting its capital expenditure pace, aligning its expansion plans more closely with demand forecasts. Reports indicate that avoiding &#34;over-investment&#34; has become one of the core concerns of Samsung's current memory business strategy.
To understand the background of the current cautious strategy, one must look back at the painful experience following the pandemic's retreat. At that time, the demand for PC upgrades plummeted, corporate procurement simultaneously shrank, manufacturers were left with excess inventory, prices continued to decline, profit margins sharply narrowed, and the South Korean storage giants were deeply mired in this cycle, a memory that remains fresh to this day
This historical context is precisely why both companies remain highly vigilant about &#34;expanding production facilities.&#34; Suppliers are generally concerned that if they rashly increase production, and demand recedes after infrastructure investment stabilizes, they will repeat the mistakes of previous surplus cycles.
<h2>Consumer End Under Siege, OEM Profit Buffer Approaches Exhaustion</h2>
For downstream manufacturers of smartphones, laptops, and SSD storage, the situation is deteriorating. The significant rise in DRAM costs, coupled with supply prioritizing HBM, means that the procurement pressure faced by ordinary consumer products will continue to accumulate.
Taking smartphones as an example, if the cost of storage increases by double-digit percentage points in the Bill of Materials (BoM), it will directly impact the fiercely competitive mid-range and volume models. Analysts believe that OEMs will only have three options: compress their own profits, lower product specifications, or raise the retail price for consumers. In the current market competition landscape, the most consumer-friendly option often comes last. The profit buffer at each stage is not infinite, and the pressure on prices being passed down to the end consumer is merely a matter of time.
Overall, the behavioral logic of Samsung and SK Hynix is clear and consistent: to fully capitalize on the scarcity premium in an overheated market while avoiding the pitfalls of blindly expanding and subsequently being trapped in discounted inventory liquidation.
The current state of the memory market does not reflect a traditional hard supply gap, but rather resembles a strategic control of scarcity driven by clear profit logic—supply is just enough to maintain high prices but insufficient to end this feast. As long as HBM continues to provide the highest gross margins, traditional DRAM will maintain a &#34;needed but not prioritized&#34; status for a considerable time. Any market participants expecting memory prices to quickly return to previous lows may need to recalibrate their expectations

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Samsung predicts that the DRAM super cycle will end in 2028. To avoid repeating the mistakes of overcapacity, it is collaborating with SK Hynix to adopt "strategic restraint." As production capacity prioritizes high-profit HBM, traditional DRAM supply is being squeezed, leading to a maximum increase of 25% in mobile material costs. Giants are maintaining high profits by controlling scarcity, and the pressure of premium is accelerating its transmission to consumer terminals

- The AI boom has propelled the storage chip industry into a rare growth cycle, yet Samsung and SK Hynix are taking a cautious approach towards expanding DRAM production.  
- Both companies anticipate a resolution in memory shortages around 2028 and are adjusting their investment strategies to avoid over-expansion.  
- This strategic control is leading to increased DRAM costs, directly impacting OEMs and consumers, as prices are unlikely to revert to previous low levels amid shifting supply priorities toward high-bandwidth memory (HBM).

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The memory super cycle may be hard to sustain? Samsung predicts: DRAM shortage may end before 2028