SK Hynix Warns: 2027 Will Be the Worst Year Ever for Memory Supplies
2027 will be the worst year ever for memory supplies, and the tightening of availability will drag on beyond 2030. This is what the CEO of SK Hynix, one of the world’s top three DRAM producers, stated in remarks reported by Reuters. Samsung and Micron are on the same page.
Samsung has already pointed to 2027 as the most critical year, with conditions expected to remain tense at least until 2028. Micron considers the shortages to be just in the early stages and estimates it can only cover 40-50% of overall demand in the coming years.
The push, as we now know, is almost entirely driven by artificial intelligence. GPU-based servers are consuming enormous amounts of high-bandwidth memory, DDR5, and NAND, and this hunger has broken the oldest rule of the industry.
For decades, DRAM and flash memory behaved like any other commodity, alternating price expansions and contractions in line with new factory openings. According to that script, 2025 and 2026 should have been years of decline, with prices falling as supply caught up. Instead, they have risen.
The ones paying the price are the consumer market. The three giants have redirected their lines towards premium segments, HBM and LPDDR5X, leaving consumer memory like DDR5, DDR4, and entry-level LPDDR in the background. This choice has inflated producers' profits and devastated the consumer market, which is facing price increases that propagate to PCs, smartphones, and consoles.
Downstream, producers are redesigning products around scarcity: Samsung is introducing a budget SSD that entirely foregoes onboard DRAM, borrowing a portion from system memory to keep costs down. Even AI companies are feeling the pinch: those renting infrastructure to train and run models are paying more, with already thin margins placed under further pressure.
New Factories, But Not Before 2028
The obvious response is more facilities, and the money is moving. SK Hynix has a multiyear expansion plan in the works worth several billion, with new plants in South Korea and the yet-to-be-defined evaluation of factories in the United States, Japan, and Southeast Asia. In June, South Korean President Lee Jae Myung announced a $576 billion plan led by SK Hynix and Samsung, while Micron has put up to $3 billion on the table to strengthen its supply chain in the U.S., along with further investments in Singapore, Taiwan, and Japan.
None of these plants will come online soon. A memory factory is among the most challenging things to build in the industry, involving permits, ultra-pure water systems, and lithographic machinery that requires months of calibration. Any project initiated today requires at least three years to reach production, and longer to achieve full capacity. Analysis firm IDC does not predict relief before 2028.
Manufacturers are financing their colossal factories in the wake of the boom, fully aware that when the new capacity comes online, it could flood the market and cause prices to plummet. It’s the same cycle as always, only broadened by AI. In the last year, according to the Register’s reconstruction, SK Hynix and Micron have tripled their revenues, while Samsung has roughly doubled them. If AI demand were to disappoint just as the new plants ramp up, those currently profiting risk an unprecedented contraction. The real race is not between memory supply and demand, but between the factories coming online and the AI bubble that might deflate sooner.