Bloomberg
SK Hynix Inc plans to double its memory chip capacity over the coming half-decade, a major expansion that should help ease a global shortage of an essential component of artificial intelligence (AI).The company is responding to an endemic deficit of storage chips that could last till 2030, SK Group chairman Chey Tae-won told reporters in Taipei, upholding a previous estimate. SK Hynix is ramping up spending to address that demand-supply imbalance though it is hard to quantify because of volatile prices for a panoply of resources including land, equipment and electricity, Chey said.
SK Group chairman Chey Tae-won speaks at the SK Hynix Inc booth at the Computex exhibition in Taipei yesterday.
The company will do whatever it requires to fund that expansion in chip wafer capacity, he added.“Whatever we need, we’ll provide it,” he said. “Until 2030 there’s still some shortage.”
SK Hynix, which with Samsung Electronics Co and Micron Technology Inc dominates the global market for memory chips, is one of the biggest beneficiaries of a global data center buildout.Trillions of dollars in projected spending by hyperscalers like Meta Platforms Inc sent SK Hynix’s and Micron’s market valuations past the US$1 trillion mark for the first time last week.Memory chips, used to store and funnel the large amounts of data required for AI services, have become one of the biggest bottlenecks to AI development. Some industry executives have declared a “super-cycle” of exponential demand for memory, from the high-bandwidth memory required to train AI such as ChatGPT to more conventional DRAM and NAND flash employed across data centers. That’s helping the industry break a decades-long cycle of boom-and-bust.Arm Holdings PLC chief executive officer Rene Haas said yesterday that memory remained the biggest bottleneck for the global AI industry, in part because the sector leaders had pulled back on expansion during the post-COVID-19 downturn of a few years ago. More generally, the memory industry remains wary of over-expanding and precipitating another market collapse.Chey said that the lead time for setting up a new site was long, with a greenfield project potentially requiring more than five years.SK Hynix’s capital expenditure this year will rise significantly from last year’s 30.2 trillion won, executives have said previously without elaborating.
