--- title: "SK Hynix Chairman: Prices Are Rising Too Fast, I Apologize" type: "News" locale: "en" url: "https://longbridge.com/en/news/295923760.md" description: "Chey Tae-won, Chairman of SK Hynix, stated that the memory chip market is experiencing \"war-like\" supply-demand imbalances due to the explosive growth in AI demand. Customer orders are approaching twice the original demand, but supply cannot keep up. He predicted that the most severe memory shortage will occur in 2027, as capacity expansion requires four to five years. Currently, Samsung Electronics, SK Hynix, and Micron Tech have allocated most of their 2027 capacity, with most customers receiving only 60%-70% of their requested quotas" datetime: "2026-08-14T10:59:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295923760.md) - [en](https://longbridge.com/en/news/295923760.md) - [zh-HK](https://longbridge.com/zh-HK/news/295923760.md) --- # SK Hynix Chairman: Prices Are Rising Too Fast, I Apologize "All customers are requesting supply volumes close to twice their original demand. This is a war for memory chips." Recently, Chey Tae-won, Chairman of the SK Group, used these words to describe the current memory chip market during an interview with media at SK Hynix's headquarters in South Korea. **"Prices are rising too fast, and I am truly sorry for this," said Chey Tae-won.** This is not the first time Chey has issued such a warning. In July, when SK Hynix listed on the Nasdaq, he pointed out that memory demand in the AI era is growing exponentially, and even doubling capacity over the next five years would struggle to meet it. In this exclusive interview, his predictions were more specific and urgent. ## **The Most Severe "Memory Shortage" Expected Next Year** **Chey Tae-won stated bluntly in the interview: "Next year will likely be the year with the largest supply gap for memory chips."** In fact, tight expectations for 2027 in the memory industry have already spread throughout the supply chain. Previously, reporters learned from multiple sources that the three giants—Samsung Electronics, SK Hynix, and Micron Tech—have basically completed negotiations for DRAM and HBM capacity allocation for the entire year of 2027. Most customers ultimately received quotas amounting to only 60% to 70% of their initial requests. Previously, Chey predicted that AI semiconductor demand in 2027 would grow by 60% to 100% compared to 2026, with overall memory demand growth remaining at 50% to 60%. Many institutions share similar judgments—Bank of Communications International expects the supply-shortage situation in the memory market to continue until 2027; Goldman Sachs predicts that the HBM supply-demand gap in 2027 will be tighter than this year. ## **"Double Orders" and a "War-Like" Market** What kind of market demand led Chey Tae-won to describe the situation as a "war"? **"Current demand is explosive," Chey stated in the interview. "All my customers are requesting supply volumes close to twice their original demand, but supply completely cannot keep up."** He compared current AI to a "four-year-old child"—as this child grows up, the knowledge and experience requiring storage will grow geometrically. Chey predicted that the usage of AI agents could increase 77-fold within five years. The memory consumption required by each AI server is several times that of traditional servers. The explosive demand on the demand side forms a sharp contradiction with the rigidity on the supply side. Chey admitted that capacity expansion takes at least four to five years. "Many semiconductor companies are not yet ready to expand production. Without sufficient memory, customers cannot produce AI computing devices and AI chips." ## **Strong Willingness to Build Factories in the US** Faced with such a severe supply-demand landscape, SK Hynix is making every effort to expand capacity. Chey revealed that the company plans to double its memory capacity within the next five years. The SK Group has announced an investment of $720 billion over the next decade for AI memory expansion. According to reports, SK Hynix is undergoing the largest-scale expansion of memory wafer fabs globally, aiming to triple its capacity by 2034 compared to current levels. Regarding capacity layout, Chey formally confirmed for the first time the intention to build front-end wafer fabs in the United States. "We have the willingness to build factories in the US; the current challenge is finding suitable locations." He stated that the company has spent over a month inspecting candidate sites globally (including in the US). "As long as the local area can provide sufficient water resources, stable electricity, available land, and a complete semiconductor industrial ecosystem, we can build factories anywhere." However, building factories in the US faces huge challenges. According to data from Counterpoint Research, considering all costs including land, utilities, and regulations, the total investment to build a semiconductor factory in the US is about twice that in South Korea. Chey stated bluntly: "In the US, land, electricity, and water are all expensive, and regulations are very strict." Currently, SK Hynix is constructing an advanced packaging factory in Indiana with an investment of approximately $4 billion, expected to be completed in 2028, but this is not front-end wafer manufacturing. Whether to further increase front-end wafer investment remains constrained by cost and infrastructure bottlenecks. ## **"Chipflation" and Changes in Industry Cycles** The shortage of memory chips is spreading from the industrial sector to the consumer sector. In the interview, Chey raised a concept worthy of attention—"Chipflation." He stated that the skyrocketing prices of memory chips have forced even companies like Apple to raise the prices of end products, thereby pushing up overall inflation levels in society. "This is by no means an ideal situation, nor is it what we desire." The market is generally concerned that SK Hynix's large-scale capital expenditure might repeat the cyclical oversupply of the memory industry—price collapses following massive investments. But Chey holds a different judgment. "Rather than saying the semiconductor industry cycle has disappeared, it is more accurate to say the cycle has been significantly lengthened." He believes the AI era is distinctly different from the past—previously, memory demand depended on population size or shipments of smartphones and PCs, whereas now a single user may simultaneously use more than 10 AI agents, each requiring massive amounts of storage. "Semiconductors are no longer commodities," Chey said. "Now they are customer-specific products custom-designed for each client's specific tasks." He revealed that Nvidia requires customized chips, and Google also hopes HBM can be tailored for them. Notably, Chey also refuted external concerns about SK Hynix's "over-reliance on Nvidia" during the interview. He acknowledged that Nvidia is the company's "most important customer," but simultaneously pointed out that the company also supplies Google, Microsoft, and other hyperscale cloud service providers. "We do not truly rely on just one customer; we simply aim to serve the largest customers in the world today." On August 14, SK Hynix's stock price closed up 3.26% at 1,645,000 Korean won per share. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment goals, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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