SK Hynix Chairman Warns: AI Chip Demand to Surge 100% Next Year, Memory Prices to Keep Rising

The AI wave continues to drive semiconductor demand. SK Hynix Chairman Choi Tae-won warned that the global chip supply-demand gap could widen further next year, leading to continued upward pressure on memory chip prices. He stated that companies worldwide are fiercely competing to secure memory supply, with the intensity of competition now approaching 'panic' levels, and supply constraints could become a new challenge for AI industry development.

According to South Korea's Maeil Business Newspaper, Choi recently stated at the Korea Chamber of Commerce and Industry's Jeju Forum that AI semiconductor demand is expected to grow 60% to 100% year-on-year next year. Overall memory semiconductor demand is also projected to increase by 50% to 60%. However, with almost no major production expansion plans on the supply side, the supply-demand gap is likely to widen further. Choi described the scramble for memory supply among global firms as 'must be described as panic.'

Choi pointed out that expanding production capacity for advanced AI memory chips requires massive capital investment and long construction periods, further constrained by equipment and labor shortages. He noted that current market demand is growing far faster than supply can increase. While SK Hynix is doing its best to maximize supply capacity, he expressed concern that memory prices might rise rather than fall.

Although tight supply is pushing memory prices higher, Choi cautioned that current price levels are not normal and do not reflect a healthy market signal. He warned that PC and smartphone manufacturers cannot sustainably pass costs onto end consumers over the long term, and if prices remain too high, it could attract new competitors or trigger government intervention.

He emphasized that semiconductor companies should not maintain high prices by restricting supply. Expanding supply and growing the overall market is the long-term strategy. Even if profit margins are temporarily squeezed, increasing supply to drive market growth will create greater value in the long run.

As competition in AI infrastructure intensifies, Choi believes semiconductor supply shortages are no longer just a business issue between companies but are directly tied to national competitiveness. He pointed out that the AI industry currently faces shortages in core infrastructure such as GPUs, memory, and power, and more supply bottlenecks may emerge in the future.

Choi stated that the AI market is undergoing a fundamental structural transformation, not just a typical cyclical fluctuation, and the supply shortage situation is likely to persist in the short term.