SK hynix group chairman Chey Tae-won has acknowledged that current memory prices are "abnormally high" and stated that there are limits to how much prices can be increased. He indicated that SK hynix is considering building a factory in the US to address supply and trade pressures.
According to The Chosun Daily, Tae-won explained that increasing supply is crucial for lowering prices, even for semiconductor companies themselves. He noted that while AI companies can absorb increased costs through investments, PC and smartphone manufacturers are forced to pass these price hikes onto their products. Since the primary customers for these devices are individuals, there are practical limits to how much prices can be raised before sales suffer.
To prevent what he termed "chipflation," where rising chip costs inflate the prices of finished goods, Tae-won emphasized the need for increased supply. He argued that even a reduction in profit margins for semiconductor manufacturers is necessary for the long-term sustainability and development of the industry. Failing to build new factories and allowing prices to continue escalating could lead to market shrinkage and the inevitable influx of new competitors.
SK hynix CEO has forecast that the coming year will be "the worst year in the industry's history from the supply perspective." Demand is also predicted to remain higher than supply beyond 2030, a projection echoed by independent analysis. While increased supply would be welcome, some analyses suggest that a "2030 DRAM squeeze" may still occur regardless of expanded production from major memory makers. The concern remains that even if memory companies address consumer price increases, the high demand from the AI sector might continue to drive up costs unless that demand significantly decreases.