SK Chairman: The price of memory chips is unusually high
According to Chosun, at the industrial forum in Jeju last week, Mr. Chey Tae-won, Chairman of SK Group, the owner of SK Hynix, commented that memory chip prices are currently "abnormally high". He believes that the entire semiconductor industry needs to take specific steps to increase output and help cool the market. To solve that problem, SK Group is considering a plan to build a manufacturing factory in the US.
The explosion of artificial intelligence leads to huge demand for high-bandwidth HBM memory, forcing manufacturers to convert production lines, cutting conventional DRAM output to prioritize high-end HBM lines. This creates a shortage in the supply of standard memory chips for consumer electronics and drives up prices.
"AI companies can shoulder increased costs thanks to large investments. However, computer and smartphone manufacturers have no choice but to transfer this increased semiconductor cost into product selling prices. Device buyers are mostly individual customers. To prevent chip inflation from driving up output product prices, expanding supply is a must," said Mr. Chey Tae-won.
Previously, SK Hynix CEO Kwak Noh-jung said that the scarcity of memory chips has not gone down, even peaking next year and lasting until 2030.
"We expect next year to be the worst year in the history of the semiconductor industry from a supply perspective. Customer demand will still exceed our production capacity, even after 2030," Mr. Kwak Noh-jung replied to Reuters after the Korean memory chip company completed its IPO on the US stock market on July 10.
SK Hynix successfully raised 26.5 billion USD, marking the largest initial public offering of shares by a foreign enterprise in the US. In the afternoon trading session of the same day on the Nasdaq, the company's shares increased sharply by 13.3%, reaching 168.85 USD.
Although the memory chip fever brought record revenue to the big three including Samsung, SK Hynix and Micron, SK Group Chairman warned that this situation could be counterproductive in the long term. High profits can lead to the entry of new competitors or create opportunities for smaller manufacturers to grow.
Some Chinese customers have abandoned products from the three major Korean and American giants to switch to chips produced domestically by CXMT and YMTC. Some multinational brands such as Corsair and Lenovo also started buying chips from the Chinese company. Apple is even asking for permission from the US government to buy memory chips from CXMT.
Although current demand still far exceeds supply, the semiconductor market is famous for its "good season - bad price" cycle. When the AI fever subsides or the supply is filled, too many manufacturers jump into the market, making competition more fierce, directly threatening the growth of traditional semiconductor corporations.
Huy Duc compiled