SK Group Chairman Chey Tae-won has issued a cautionary statement about the potential global implications of the ongoing shortage in artificial intelligence (AI) memory chips. As demand for these components continues to outstrip supply, Chey suggests that the issue could escalate into a geopolitical concern. He highlighted that more governments are beginning to view access to cutting-edge memory chips as a crucial component of their economic security strategies, which might lead them to exert pressure on other nations to ensure a steady supply.
Forecasting a significant increase in demand, Chey pointed out that customers are projected to need between 60% and 100% more AI memory chips by 2027 compared to current levels. However, the growth in production capacity is not keeping pace. Of particular concern is the shortage of high-bandwidth memory (HBM), which is essential for AI processors and currently experiencing the most acute supply constraints.
In response to these challenges, SK hynix, a major player in the semiconductor industry, is ramping up its investments in new manufacturing capabilities. The company is speeding up the development of facilities in South Korea and is also exploring potential overseas locations, including the United States. Chey underscored the importance of swiftly expanding production to sustain South Korea’s leadership in the semiconductor sector.
Chey also warned that if the production expansion does not occur promptly, it could result in prolonged high prices. Such a scenario might incentivize new competitors to enter the market, potentially disrupting the global semiconductor landscape. Therefore, accelerating investment and production is crucial not only for maintaining market stability but also for preventing new entrants from destabilizing existing dynamics.