When we talk about what cell phones are more expensivethe consoles continue to rise in price or that to buy RAM memory you almost have to take out a mortgage, we have to know that three companies (Samsung, SK Hynix and Micron) control around 90% of world production and that they have abandoned the consumer sector to focus on memory for AI platforms. This is very bad news for consumers, but excellent for those companies that are seeing record profits.
And if the question is when the storm will end, the answer is that we are in the eye of the hurricane. And SK Hynix is clear that the worst is yet to come.
Guateworse. Different leaders of companies related to AI and components have already commented that we are experiencing an unusual situation, which Years of wild investment in AI remain and that, perhaps, everyone wants to have what they are going to need for the next 10 years as soon as possible, hence the shortage. The heads of the three companies mentioned do not usually speak out, but a few days ago, the CEO of one of the protagonists opened the microphone to warn that things will not improve a little.
Kwakk Noh-jung is the CEO of SK Hynix, the other South Korean company that dominates the scene, and a few days ago commented that 2027 will bring the worst memory chip crisis ever experienced. Beyond the depressing forecastcommented that demand is expected to exceed supply beyond 2030, which coincides with some of the pessimistic forecasts from industry heavyweights.
goes along the line What other CEOs of related companies have also said, such as Sanjay Mehrotra, CEO of the American company Micron, who in the June results presentation commented that they expect the shortage to persist beyond 2027 due to the very high demand. In addition, it showed that Micron can only satisfy 60% of its customers’ demand.
New plants. To try to remedy the situation, the big three are investing in new plants and clean rooms to increase memory production (for AI platforms, of course, not for consumer products). In the case of SK Hynix, as we see in Reutersare considering opening factories in the United States, Japan and Southeast Asia. Kwak notes that “nothing has been decided yet,” arguing that he is evaluating which location can provide the greatest advantage for his business.
The two South Korean giants are participating in a government plan to double the country’s memory chip production capacity over the next five years, with $266 billion each to build chip production facilities.
In the United States, for its part, similar quantities are also being handled. Micron has changed its investment plan of 200,000 million for one of 250,000 million to address the shortage, with its eyes on the Clay plant in New York, which will become one of the largest semiconductor manufacturing centers in the history of the country.
Looking for options. Meanwhile, the crisis continues and companies that create consumer products must find solutions. It has been reported that some like Asus could be interested in opening their own factoriesthis being a slow and very expensive process because creating a clean room from scratch is not easy. Another option is to purchase installations from other companies or look at alternative sources.
For example, Apple, after raising the prices of iPad and Mac by an average of 20% (and we will see what happens with the iPhone 18 Pro), would be interested in the memory of the Chinese CXMT. And speaking of China, Huawei is working to expand its empire from semiconductors to RAM with a new plant.
Demand on the horizon. All this happens while, in the United States, a demand collective action against Samsung, SK Hynix and Micron for alleged price manipulation and coordinated restriction of DRAM memory production. In the presentations of results and share values, we already see that this crisis has been good for the three companies and the curious thing is that it would not be the first time it has happened.
At the beginning of the century, the three companies were investigated for an abusive pricing case that ended with Samsung and SK Hynix fined and Micron getting off the hook because of their cooperation. In China they were investigated again between 2016 and 2018 for a similar case, so we will have to wait and see what happens, but the fact that the price of machines like the Steam Deck has risen almost 300 euros out of nowhere… no one can take it away from us anymore.
Buy now. And that is the best advice. Although it is not the one you probably want to read, because you would much rather know when the crisis will end, the best recommendation is that, if you think you are going to need any product soon or need to renew equipment, you better pay the current huge surcharge rather than having to face the one they are expected to have in a few months.
Some companies have already mentioned exactly that, that you buy as soon as possible the technology that you think you are going to need for the next five years because things seem like they are going to get much worse before they get better. If it improves, because there are also companies that point out that lPrices will never drop to pre-crisis levels.
In Xataka | Memory experts see no relief: “Potential price increases are higher than expected due to shortages”
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