SK hynix expects memory supply conditions to become even more difficult in 2027, as strong demand for high bandwidth memory limits the capacity available for conventional DRAM.
The company’s chief executive, Kwak Noh-jung, said next year could be the worst period in the industry’s history from a supply perspective. He also expects customer demand to remain above the company’s production capacity beyond 2030.
The warning suggests that current pressure on memory prices may continue for several years. Consumers have already faced higher costs for DDR5 memory, graphics cards, laptops, smartphones, storage products, and other electronics. Those increases could become more severe if manufacturers continue directing a larger share of production toward AI hardware.
High bandwidth memory, commonly called HBM, is used in advanced AI accelerators and data centre systems. Demand has risen rapidly as companies expand infrastructure for training and running large AI models.
HBM growth is reducing the supply available for standard DRAM
Memory wafer supply is expected to increase by around 12 percent annually during 2027 and 2028. However, approximately half of that additional capacity could be used for HBM production.
This would limit annual bit growth for non HBM DRAM to around 15 percent, while demand is forecast to rise by 22 percent.
| Memory market estimate | 2027 outlook |
|---|---|
| Expected wafer supply growth | Around 12 percent |
| Share of new supply used by HBM | Approximately half |
| Non HBM DRAM bit growth | Around 15 percent |
| Expected demand growth | Around 22 percent |
| Supply gap | Demand growth exceeds available bit growth |
That difference could keep prices elevated across consumer and business products. Standard DRAM remains essential for desktop PCs, laptops, servers, gaming systems, smartphones, and many embedded devices.
Manufacturers cannot instantly move all production between memory types. HBM requires advanced packaging, testing, and specialised manufacturing processes. Increasing HBM output can therefore consume both wafer capacity and other limited resources that might otherwise support conventional memory.
Samsung and SK hynix are rapidly expanding HBM shipments
Samsung is expected to ship approximately 12 billion gigabytes of HBM in 2026, rising to around 20 billion gigabytes in 2027.
SK hynix is projected to supply about 18 billion gigabytes in 2026 and 24 billion gigabytes in 2027.
| Company | Estimated HBM supply in 2026 | Estimated HBM supply in 2027 |
|---|---|---|
| Samsung | 12 billion GB | 20 billion GB |
| SK hynix | 18 billion GB | 24 billion GB |
These increases show how much production is being redirected toward AI customers. HBM carries higher margins than many standard memory products, giving manufacturers a strong financial incentive to prioritise it.
Data centre customers also tend to place large orders with long term supply agreements. Consumer memory buyers usually have less bargaining power and face more volatile retail pricing.
New factories will not solve the shortage immediately
Samsung and SK hynix are expanding production capacity, but several major facilities will not reach full operation for years.
Samsung’s P5 Fab 1 is expected to begin production by July 2027. P5 Fab 2 and another facility in Yongin are scheduled to start operating in 2029.
SK hynix plans to bring its Yongin Y1 facility online in February 2027, while the Y2 fab is expected to begin production during the second half of 2028.
| Manufacturer | Facility | Expected production start |
|---|---|---|
| Samsung | P5 Fab 1 | July 2027 |
| Samsung | P5 Fab 2 | 2029 |
| Samsung | Yongin facility | 2029 |
| SK hynix | Yongin Y1 | February 2027 |
| SK hynix | Yongin Y2 | Second half of 2028 |
Bringing a new fab online does not immediately produce maximum output. Manufacturers must install equipment, improve yields, qualify products, and gradually increase production.
This means new capacity may take time to influence market pricing. Demand could also continue growing while those factories ramp up, reducing the effect of the additional supply.
Consumer hardware prices may remain under pressure
A prolonged memory shortage could affect nearly every category of electronics.
Desktop builders may face higher prices for DDR5 kits. Laptop manufacturers could increase system prices or reduce the amount of memory included in entry level models. Graphics card companies may also face higher costs for GDDR memory.
Smartphones, tablets, game consoles, handheld gaming PCs, and storage devices could experience similar pressure. Manufacturers may respond by increasing prices, reducing specifications, or delaying product launches until component supply improves.
Memory costs can also affect cloud services and data centres. Server operators require large amounts of DRAM in addition to HBM, so shortages may increase the cost of hosting, AI inference, and enterprise computing.
Chinese memory production could provide some relief
CXMT’s planned transition toward DDR6 production could eventually reduce pressure on the market.
However, the timing remains uncertain, and it is unclear how much supply the company will make available outside China. Export rules, trade restrictions, production yields, and customer qualification could all limit its global impact.
Even if CXMT expands successfully, it may take years before its output becomes large enough to influence worldwide pricing.
The main concern is that AI demand is growing faster than conventional memory supply. HBM expansion benefits advanced computing, but it leaves fewer resources available for the broader electronics market.
SK hynix’s warning suggests that 2027 may not bring relief from current memory price increases. Instead, supply conditions could become tighter before new factories and production technologies begin closing the gap later in the decade.
Discussion (0)
Be the first to comment.