Brace yourself for the latest update to the memory supply crisis. And it's not good news. Not at all. Samsung and SK Hynix, who together are responsible for 70% of the DRAM market, have signalled their reluctance and inability, respectively, to sufficiently expand memory production. And that has lead some industry observers to conclude the crisis will run through 2028, and perhaps even beyond.
"Rather than rapidly expanding facilities, we will pursue a strategy of maintaining long-term profitability," a Samsung rep said during a recent investor relations call (via Tech Insight), adding, "we will minimize the risk of oversupply through a capital expenditure (CAPEX) strategy that balances customer demand and pricing."
To be clear, it's not that production of memory isn't increasing. It's that the increase in demand is scaling up even faster, while some key investments in production will take years to impact the supply side. Trendforce predicts that memory supply will increase by 23% in 2026. But demand will be up by 35%.
Meanwhile, US company Micron is planning to invest nearly $10 billion in a new DRAM facility in Japan. But that won't be shipping out memory chips until the second half of 2028. Tech Insight therefore concludes that the memory supply crisis will "continue beyond 2028".
Overall, you can see what the so-called Dramurai are probably up to. They're cautiously increasing their production capacity. But what they very likely want to avoid is massively ramping up production, only to find the AI bubble bursts and they're left with the mother of all memory supply gluts and imploding profitability.
And that means so long as the AI boom continues, it looks like memory is going to come at a premium. So, be careful what you wish for. Because it sure seems like the only way that memory prices normalise any time soon is thanks to an AI bubble burst and a broader market meltdown.
