SK Hynix Warns Global Memory Chip Shortage Won’t End Anytime Soon

SK hynix has cautioned that the global memory chip shortage could continue until 2030 as growing demand for artificial intelligence puts pressure on supplies.

Key points

• According to Counterpoint Research's September report, SK hynix held 25% of the global DRAM market by revenue, behind Samsung's 38% share and slightly ahead of Micron's 24%.
• The facility is projected to produce approximately 55, 000 to 60, 000 wafers per month using the company's 1b DRAM manufacturing process.
• The firm has additionally secured long-term supply agreements with 14 major customers, covering more than half of its projected production capacity for 2027 and 2028.
• Its new M15X production facility is projected to reach full capacity by the end of 2026, supporting the production of advanced HBM4 memory.
• The South Korean memory manufacturer issued the warning alongside its financial results for the third quarter of 2026.

Notably, the South Korean memory manufacturer issued the warning alongside its financial results for the third quarter of 2026. It indicated record revenue and operating profit.

In practice, the firm noted revenue of approximately $78.4 billion, crossing a major quarterly sales milestone for the first time.

While net profit stood at approximately $29.8 billion, operating profit reached around $62.4 billion. This offered SK hynix an operating profit margin of 80% and a net profit margin of 38%. AI Demand Drives Record Earnings.

SK hynix remarked robust demand for AI memory supported rise its revenue and profits.

Sales of its high-bandwidth memory chips, particularly HBM4, continued to grow as AI firms expanded their computing infrastructure.

HBM is a type of high-speed memory applied in powerful processors that run AI models.

Meanwhile, the firm expects HBM4 to overtake the older HBM3E standard in both sales revenue and shipment volume during the fourth quarter.

Demand for server DDR5 memory and LPDDR5 SOCAMM memory modules has additionally climbed.

These firms additionally supply memory chips applied in smartphones and other electronics, including Apple devices. Smartphone Brands Have Discovered a Way to Secure Cheaper RAM. Memory Shortage Could Last Until 2030.

Despite its solid financial performance, SK hynix cautioned that memory manufacturers are struggling to keep up with demand.

Meanwhile, the firm expects demand to exceed supply through 2030, mainly as of continued investment in AI systems.

In the coming years, businesses and consumers are projected to drive much of the demand for AI-related memory.

Over the longer term, self-driving vehicles, robotics, and other AI-powered technologies could growth demand further.

SK hynix remarked building new factories and developing advanced manufacturing processes takes considerable time, making it challenging to growth production swiftly. SK Hynix Intends to Rise Production.

To address the shortage, SK hynix intends to expand its manufacturing capacity.

In practice, the facility is projected to produce approximately 55, 000 to 60, 000 wafers per month using the company's 1b DRAM manufacturing process.

SK hynix is additionally increasing production of its newer 1c DRAM technology. It is employed in products such as LPDDR6.

Meanwhile, the firm has noted higher sales of its 321-layer NAND flash memory applied in enterprise solid-state drives.

It expects this technology to account for more than half of its domestic NAND production capacity by the end of the year.

For context, the firm is additionally developing High Bandwidth Flash (HBF), a new type of storage designed for AI servers.

HBF could allow AI systems to access sizeable amounts of data without keeping everything in expensive high-speed RAM.

SK Hynix Could Manufacture Memory Chips in US for the First Time. Firm Reports Robust Cash Position. SK hynix additionally noted improvements in its financial position.

At the end of the third quarter, the firm held approximately $85.8 billion in cash and cash equivalents, an rise of around $19.9 billion from the previous quarter.

Its borrowings fell by approximately $2.1 billion to $11.8 billion.

Consequently, the company's net cash position rose to approximately $73.9 billion.

For context, the firm has additionally secured long-term supply agreements with 14 major customers, covering more than half of its projected production capacity for 2027 and 2028. SK Hynix Cancels Solidigm IPO Intends.

SK hynix has additionally decided to cancel its aims for an initial public offering (IPO) of Solidigm, its flash memory subsidiary.

CEO Kwak Noh-Jung remarked the proposed listing was intended to raise capital for expanding Solidigm's production facilities while reducing the financial burden on SK hynix.

Nevertheless, the business reconsidered the plan after reviewing market conditions and concluded that proceeding with the IPO would not deliver the projected benefits.

SK hynix additionally aims to return approximately $74.9 billion to shareholders during 2026 through dividends and share repurchases, including gains from its investment in Japanese memory manufacturer Kioxia.

Notably, the company's latest results show how strongly AI demand is benefiting memory manufacturers. Nevertheless, its warning suggests that the global shortage of advanced memory chips may continue for a number of more years. Stay Connected with ProPakistani.

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