SK hynix CEO: The shortage of memory chips may continue beyond 2030, and more customers are choosing to sign long-term contracts

The tight supply situation for memory chips may persist for longer.

SK hynix CEO Kwak Noh-Jung said in an interview that the current shortage of memory chips affecting the computer, automotive, and consumer electronics markets may continue beyond 2030.

Kwak Noh-Jung made the remarks after completing a record-setting U.S. depositary receipt (ADR) issuance by SK hynix. He said customers are signing long-term contracts because “they believe the shortage situation will last even longer.” This was also his first interview with English-language media.

Meanwhile, U.S. rival Micron CEO Sanjay Mehrotra made similar comments last month, saying, “It’s not yet clear when memory supply will catch up with continuously rising demand.”

Tight memory chip supply is driven by strong demand spurred by the current wave of AI data center construction. This supply-demand imbalance is spreading to end markets such as computers, smartphones, and automobiles, intensifying overall chip shortages, and prompting customers to accelerate securing long-term supply agreements.

SK hynix shares rose 14.25% during the intraday trading on the first day of trading on the U.S. stock market.

Long-term contracts lock in demand; downstream firms judge the shortage will continue

To hedge against the risk of a potential oversupply in the future, SK hynix has signed more long-term supply contracts with customers. Kwak Noh-Jung pointed out that customers’ actual actions themselves reflect market expectations—intensive execution of long-term contracts confirms downstream firms’ judgment that the supply tightness will persist.

Micron’s comments further reinforce this industry consensus. Last month, Sanjay Mehrotra said during an earnings call that it is currently unclear when memory supply will be able to keep up with the growth rate of demand. His wording closely aligns with SK hynix’s assessment.

For investors, the shared expectation among leading memory chip makers that the supply shortage will last for several years, combined with continued expansion in AI demand, suggests that profitability visibility for the industry could remain relatively clear over a longer time window.

Record financing; moving toward the U.S. AI industry hub

The interview took place after SK hynix completed its fundraising. The company raised $26.5 billion through its U.S. depositary receipt (ADR) issuance, setting a record for the largest first such issuance by a foreign company in the U.S.

Kwak Noh-Jung said part of the motivation for this issuance was to build closer cooperation with AI customers and expand channels for acquiring AI talent.

He also said it cannot be ruled out that the company may establish a memory chip manufacturing base in the U.S., though the site must meet the company’s standards for power, water resources, and talent.

“We need to move closer to the core areas of U.S. AI, collaborate with them more closely, grow together, and contribute to the AI ecosystem,” he said.

HBM first-mover advantage; laying the competitive landscape for the AI era

The AI infrastructure construction boom fundamentally reshapes the competitive landscape of the memory chip industry. SK hynix, Samsung Electronics, and Micron—three of the world’s major memory chip makers—have all become important beneficiaries of the AI wave.

Large-scale capital expenditures by data center operators are boosting demand for both traditional memory chips and high-bandwidth memory (HBM).

HBM is a new type of memory chip designed specifically for AI systems and is highly valuable when used together with Nvidia AI processors. SK hynix moved into the HBM space earlier, and with its first-mover advantage, established a leading position in this critical track.

Expansion of AI infrastructure led by Nvidia has completely changed the company’s trajectory. SK hynix was formed out of the restructuring and rescue led by Korean creditors of LG Semiconductor and two other companies, including Modern Electronics; after many years mired in cyclical industry volatility, it has now achieved a significant transformation.

Risk notice and disclaimer

        The market is risky; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article align with their specific circumstances. Invest at your own risk based on this.