AI memory shortage threatens to trigger geopolitical strain, warns SK Group chief

Seoul [South Korea], July 20 (ANI): SK Group Chairman Chey Tae-won warned that the global shortage of artificial intelligence memory chips could escalate into a geopolitical issue, predicting that memory demand will far outpace supply through 2027 despite aggressive capacity expansion efforts.
Speaking at a press briefing on the sidelines of the Korea Chamber of Commerce and Industry's Jeju Forum, Chey stated that foreign governments have already begun intervening on behalf of their domestic industries to secure critical chip supplies, according to a news report by The Korea Herald.
Chey noted that major customers asked SK hynix for 60 to 100 per cent more AI memory in 2027 compared to current levels. With artificial intelligence accounting for over half of total semiconductor consumption, overall demand growth sits at a minimum of 50 to 60 per cent while production fails to match the surge.
"Building where we can, as fast as we can, has almost become the lifeline of Korea's semiconductor industry," the news report quoted Chey. "No company has meaningful new capacity coming online next year."
Citing a Counterpoint Research, the report said that SK hynix held 58 per cent of the global high-bandwidth memory market by revenue in the first quarter of 2026, leading competitors Micron and Samsung, which held 21 per cent each. Chey explained that this growing supply imbalance created widespread lobbying efforts, with governments treating memory access as a vital element of economic security.
"Right now, companies absorb the pressure," Chey said. "Governments will start pressuring other governments soon."
Chey argued that abnormally high market prices could ultimately harm Korean chipmakers by driving device manufacturers into price inflation, drawing in new market players, and inviting geopolitical friction.
"Prices have to normalize," Chey added. "Otherwise, the market shrinks and competitors flood in," he said, referencing Tesla CEO Elon Musk's interest in semiconductor manufacturing as an early indication of new entrants entering the sector.
To address the bottleneck, SK hynix accelerated domestic construction, moving the initial clean room opening at its Yongin cluster forward to February 2027 from May. The firm committed an additional 21.6 trillion won (USD 14.52 billion) in March and began converting its Cheongju M15X facility into a dedicated high-bandwidth memory base.
The manufacturer is also reviewing global candidates for future fab sites based on speed, scale, and infrastructure readiness. When asked about US Commerce Secretary Howard Lutnick's effort to encourage South Korean semiconductor investment inside the United States, Chey minimized the pressure.
"The question is always the same: how much will you invest in the US, how much will you reshore," Chey said.
"This time isn't different," he said, noting that prospective US sites are evaluated on operational merits rather than political concessions. The company's confirmed American investment remains a $3.87 billion packaging and research facility in Indiana announced in April 2024. (ANI)