Global memory deficit set to prolong Korean chip supercycle through 2028
The projection gained ground after US-based Micron Technology reported that over 75 per cent of its planned production for fiscal 2027 stood fully committed to buyers, with enterprise discussions shifting toward securing 2028 inventories.
The global memory shortage is worsening, prolonging the boom for Korean chipmakers Samsung Electronics and SK hynix according to a report by The Korea Herald. US-based Micron Technology indicated that over three-quarters of its planned production for the 2027 fiscal year is already contracted, prompting discussions focusing on securing inventories through 2028.
Micron's Chief Executive Sanjay Mehrotra acknowledged a heightened demand, with memory and storage supply-demand conditions projected to tighten significantly in fiscal years 2027 and 2028 compared to 2026.
Buyers are now committing to multi-year contracts, with Micron expanding its roster of strategic customer agreements to 26, up from 16, and extending these commitments through 2031. These customer pledges account for $32 billion, generating over 35 per cent of the company's projected revenue through 2030.
Similar supply constraints have been reported by South Korean industry leaders. Samsung Electronics had announced in July that supply deficits would persist through 2028, and the firm entered contracts with five major data-center operators, with talks already underway with five more, aiming to secure 60 to 70 per cent of its forward capacity under contract. SK hynix also secured five-year supply agreements with approximately 10 key clients during the same period.
The supply pressure was not limited to high-bandwidth memory for artificial intelligence accelerators. Fabricators redirected advanced dynamic random-access memory wafer capacity towards high-bandwidth memory manufacturing lines, limiting standard dynamic random-access memory availability across server, personal computing, and mobile segments, driving up aggregate price baselines.
Hence, third-quarter earnings projections for South Korean manufacturers were lifted, with Samsung Electronics reaching an estimated 110.3 trillion won ($81.1 billion) and SK hynix at 78.1 trillion won ($57.3 billion), marking a 23 per cent and 29 per cent increase respectively. Combined, their operating results totaled approximately 188.3 trillion won ($138.2 billion), a 38 trillion won ($27.89 billion) increase from the previous quarter.
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