Will the AI spending surge trigger an unprecedented memory chip shortage?
Surging hyperscaler investment and the shift to HBM4 could leave global memory supplies critically tight next year, the brokerage firm KB Securities says.
Samsung Electronics, left, and SK hynix
YONHAP
Soaring investment in AI could push the memory chip market into an unprecedented supply shortage, according to the latest analysis by KB Securities.
“Global hyperscalers have recently sharply raised their AI infrastructure investment plans for next year to $1.3 trillion, up 60 percent from this year,” KB Securities said on Monday. “The market is expected to face the tightest supply conditions in history.”
Memory chip inventories at Samsung Electronics and SK hynix have already fallen to less than 10 days’ worth as of the third quarter, according to Kim Dong-won, head of research at KB Securities.
“This is moving beyond a simple recovery in demand, with a high likelihood that the amount of memory actually available for supply will become critically limited,” Kim said. “Next year, we could even see available memory supplies effectively run out.”
KB Securities expects memory chips to account for 40 percent of AI infrastructure investment in 2026, up from 14 percent in 2025. The share is projected to rise further to 57 percent in 2027, more than quadrupling in two years.
Market researcher TrendForce has an even higher estimate, forecasting that memory chips will account for 68 percent of AI infrastructure investment next year.
The transition to HBM4, the next generation of high bandwidth memory, is expected to be a major driver of the shortage.
HBM4 requires roughly three times the wafer capacity of conventional dynamic random-access memory, or DRAM, according to KB Securities.
Expanding HBM4 output therefore leaves less production capacity available for conventional DRAM, which could further tighten supplies.
KB Securities also said recent declines in the shares of Samsung Electronics and SK hynix have been excessive.
The chipmakers’ shares have fallen 38 percent from their respective peaks over the past three months, pushing their price-to-earnings ratios based on next year’s projected earnings to around three.
“Samsung Electronics and SK hynix are expected to post record earnings for three consecutive years, while continuing large-scale shareholder return programs,” Kim said. “The time has come for a strong re-rating from extremely undervalued levels.”
BY KIM EUN-BIN [[email protected]]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
