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Regardless of efforts to develop capability, semiconductor gamers are struggling to maintain tempo with demand
Because the AI increase continues to achieve momentum, two of the world’s main chipmakers, SK Hynix and Samsung Electronics, are warning that their enlargement plans is not going to transfer quick sufficient to ease provide chain bottlenecks.
The businesses, each which reported their newest monetary outcomes this week, mentioned that the reminiscence chip provide disaster could be unlikely to alleviate for the following two years regardless of their greatest efforts.
“We’re planning a considerable enhance in our capital expenditure in 2026 as AI-driven demand is more likely to proceed,” mentioned Kim Jae-june, govt vice-president of Samsung’s reminiscence enterprise, as reported by the Monetary Instances. “However provide shortages are more likely to worsen as capability enlargement is anticipated to be restricted this 12 months and subsequent.”
SK Hynix has plans to take a position 19 trillion gained ($12.9bn) within the development of a semiconductor packaging facility in Cheongju, whereas Samsung is investing 60 trillion gained ($41.5 billion) in its P5 manufacturing facility in Pyeongtaek, South Korea, which broke floor in November final 12 months.
Each investments are pushed by the surge in demand for Excessive Bandwidth Reminiscence (HBM), a vital a part of AI accelerators and information centre GPUs, in addition to different reminiscence chip know-how; SK Hynix says it expects the HBM market to proceed to develop considerably between 2025 and 2030, with projections indicating a compound annual progress price of 33% till 2030.
Nevertheless, the extra capability being generated from these new services will take time to understand.
“Demand is rising sharply, however it takes time to develop capability, so the mismatch in demand and provide is worsening, pushing chip costs increased,” added Music Hyun-jong, president of SK Hynix, in the identical FT report.
The extent of the reminiscence bottleneck is already being felt acutely the world over. The price of dynamic random entry reminiscence (DRAM), for instance, has skyrocketed since 2024, and is about to double once more this 12 months.
On the identical time, the business can be within the midst of a big shift, shifting from the present HBM3E know-how to the extra superior HBM4. These subsequent technology reminiscence chips will supply increased information switch speeds (exceeding 1 TBps per stack) and greater than double the bandwidth of HBM3E, making them supreme for AI information centres.
SK Hynix is presently the worldwide chief on this newest reminiscence design, accounting for roughly 60% of the general market, in accordance with Macquarie Fairness Analysis. Samsung, nevertheless, is anticipated to quickly problem this place, starting manufacturing of its personal HBM4 chips subsequent month.
Evidently, this reminiscence bottleneck is making each SK Hynix and Samsung very wealthy.
SK Hynix reported a internet revenue of 97.15 trillion gained ($67.9 billion), up 46.8% year-on-year, whereas Samsung noticed earnings rise to 45.21 trillion gained ($31.6 billion, up 31.2% year-on-year.
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