SK Group Chairman Choi Tae-won has participated in multiple interviews in recent weeks, sharing his predictions for the development of the semiconductor industry and artificial intelligence infrastructure fields. Speak on the channel CNBCHe called for preparations for a growing memory shortage next year and rising prices for various devices equipped with memory.
Image source: SK hynix
The person in charge of SK Group literally described the imbalance between supply and demand in the memory market: ‘This situation is reminiscent of wartime’. According to him, the memory shortage will reach its peak next year. Demand from customers of SK Hynix’s unit for its memory supplies has doubled this year. At the same time, it will take another four to five years to expand production capacity. Memory makers simply are not ready to scale up production capacity to fully meet demand.
Almost all major customers have asked SK Hynix to double its memory supply. The company is trying its best to increase production but is still lagging behind market demand. As the prosperity of artificial intelligence increases memory demand on the terminal device side, memory demand in various market segments will grow. For example, in addition to smartphones, PCs and wearable devices will also require more memory, so memory demand will not be concentrated in one market segment. Many AI agents will run on many different hardware platforms, and they all require more memory. Unfortunately, as Chae acknowledges, rising memory prices triggered widespread inflation from which everyone suffered.
The choice of where to build a new business depends not only on the availability of energy, available space and water, he said. In the wafer manufacturing sector, 600 to 700 companies are involved in supplying materials and chemicals. If such infrastructure can be developed at a new location, then there is no doubt that establishing a memory production facility there is possible.
SK Group is also trying to insure itself against possible drops in memory demand by not only signing long-term agreements with customers that are renewed annually. The company is ready to provide memory chip leasing services and establish memory production joint ventures. The SK Group includes an energy solution provider (SK Innovation) and a communications provider (SK Telecom), so the holding company can independently participate in the establishment of data centers together with partners. The head of SK Group advised investors not to sell the company’s shares, expressing confidence in the long-term upward trend in prices and continued demand for memory.
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