SK Hynix CEO Warns of 'Worst-Ever' Memory Chip Shortage by 2027

SK Hynix Chief Executive Kwak Noh-jung has warned that the global memory industry is heading for its worst-ever supply shortage in 2027, forecasting that demand will continue to exceed the company's production capabilities well into the next decade. The executive's comments came in a Reuters interview on Friday, the same day the South Korean chipmaker made its trading debut on the Nasdaq.

Demand to Outpace Supply

Driven by the explosive growth in artificial intelligence, demand for advanced memory chips is surging. "We forecast that next year will be the worst year in the industry’s history from the supply perspective," Kwak told Reuters, referring to 2027. He added that the company's customer demand continues to rise against limited production capacity.

Kwak projected a long-term structural imbalance, stating, "We still forecast that customer demand will remain higher than our supply capacity even beyond 2030." This outlook aligns with commentary from key industry players, including Nvidia CEO Jensen Huang, who last month said he expects shortages of AI memory to persist for several years. Analysts at UBS also expect the global DRAM industry to remain undersupplied until at least the second quarter of 2028.

Market Impact and Expansion Plans

SK Hynix has become a pivotal player in the AI boom due to its leadership in high-bandwidth memory (HBM), a critical component in Nvidia's AI chipsets. The company's market position was underscored by its successful Nasdaq debut, where its shares rose 14.8% to $170.94 on Friday.

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In response to the supply challenge, SK Hynix is pursuing aggressive expansion. The company is considering the United States, Japan, and Southeast Asia for a future wafer fabrication plant and is already investing heavily in the U.S. with projects including:

• Around $4 billion for an advanced chip packaging factory in Indiana.
• $10 billion to develop a U.S.-based AI solutions company.

These initiatives are part of a broader plan by the South Korean government, involving both SK Hynix and Samsung Electronics, to double the country's memory chip production capacity within five years.

Financial Performance

The intense demand for its HBM products has dramatically boosted SK Hynix's financial results. The company reported a record operating profit of 47 trillion won ($31 billion) in 2025, a significant turnaround from an operating loss in 2023. The company's shares have surged more than sevenfold over the past 12 months, reflecting investor confidence in its central role in the AI supply chain.