A company that’s profiting enormously from the crisis… which it might be helping to perpetuate?
On the occasion of SK Hynix’s initial public offering on the Nasdaq (the New York Stock Exchange’s 100% tech-focused market), its CEO, Kwak Noh-Jung, warned that the global memory industry—far from stabilizing—is heading toward the most severe crisis in its history starting in 2027. Even more concerning, the executive believes that demand is likely to continue to outpace production capacity beyond 2030, despite massive investments by major manufacturers.
Unsurprisingly, the SK Hynix CEO explains that this situation is directly linked to the explosive growth in demand for memory for artificial intelligence infrastructure. The latest-generation AI accelerators rely on HBM (High Bandwidth Memory), a component that has become indispensable for training and running large artificial intelligence models. In fact, the leading memory manufacturers—Micron, Samsung, and SK Hynix—are prioritizing this type of chip over others that are less profitable. Kwak Noh-Jung therefore has an easy time predicting a RAM apocalypse, even as his own company contributes to this very situation.
SK Hynix—along with Micron and Samsung—has, however, announced massive investments in recent months to increase its production capacity. The talk is of allocating tens of billions of dollars. The effects of these investments, however, will not be felt immediately, and, according to Kwak Noh-Jung, they will therefore not be enough to meet ever-increasing demand. SK Hynix’s statements, however, are based on the assumption of ever-increasing AI growth in the coming months and years. There’s no guarantee that the market won’t experience a reversal in 2028, 2029, or 2030, for example. SK Hynix also seems to be paying little attention to the possible emergence of other players: more lucrative than ever, the DRAM market is of great interest to Chinese manufacturers, who are gaining momentum.
