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

SK hynix, a South Korean memory manufacturer, has forecasted that the global memory chip shortage will persist until 2030 due to soaring demand for artificial intelligence (AI) applications. In its third quarter of 2026 financial results, the company announced record revenue of approximately $78.4 billion and an operating profit of around $62.4 billion, achieving an astonishing 80% operating profit margin and 38% net profit margin.

The significant surge in AI memory demand, particularly for high-bandwidth memory chips (HBM4), has propelled SK hynix's revenue and profits. HBM4 is a high-speed memory used in powerful processors handling AI models. The company expects HBM4 sales revenue and shipments to surpass those of the older HBM3E standard by the fourth quarter.

SK hynix also observed increased demand for server DDR5 memory and LPDDR5 SOCAMM memory modules. Counterpoint Research's September report revealed that SK hynix holds a 25% share of the global DRAM market by revenue, trailing Samsung's 38% and Micron's 24%. Both companies produce memory chips for smartphones and various electronic devices, including Apple products.

Despite its financial prowess, SK hynix warned that memory manufacturers are grappling to meet consumer demand. The company anticipates that demand will outpace supply through 2030, mainly due to ongoing AI system investments. In the years ahead, businesses, consumers, and emerging technologies like self-driving vehicles and robotics will likely further fuel AI-related memory demand.

To address the shortage, SK hynix aims to expand its manufacturing capacity. Its new M15X production facility, slated for full capacity by year-end, will produce 55,000 to 60,000 wafers monthly using the 1b DRAM manufacturing process. The company is also ramping up production of its newer 1c DRAM technology, employed in products like LPDDR6, and has reported higher sales of its 321-layer NAND flash memory used in enterprise solid-state drives.

SK hynix expects this technology to account for more than half of its domestic NAND production capacity by year-end.

Moreover, the company is developing High Bandwidth Flash (HBF), a novel storage solution targeted at AI servers. HBF could enable AI systems to swiftly access substantial data quantities without relying on expensive high-speed RAM. SK hynix also canceled Solidigm, its flash memory subsidiary's initial public offering (IPO) plans, opting not to proceed with the IPO after reconsidering market conditions. The company plans to return about $74.9 billion to shareholders via dividends and share repurchases during 2026.