SK Group Chairman Chey Tae-won raised concerns over a global shortage of artificial intelligence memory chips that could intensify geopolitical tensions. Despite substantial investments and capacity expansions, demand is forecasted to far exceed supply through 2027.
- AI memory demand predicted to surpass supply until at least 2027
- South Korea’s SK hynix leads global high-bandwidth memory market
- Governments ramp up pressure to secure chip supplies amid rising prices
What happened
SK Group Chairman Chey Tae-won warned that a shortage of AI memory chips is likely to become a significant geopolitical issue. Speaking at the Korea Chamber of Commerce and Industry’s Jeju Forum, Chey revealed that demand for AI memory modules from major clients is expected to increase by 60% to 100% in 2027 compared to current levels. Despite aggressive efforts to expand production capacity, including advancing facility openings and large-scale investments exceeding $14 billion, supply will fall short of this rising demand.
Chey also observed that governments worldwide are stepping in to support their domestic semiconductor sectors amid this imbalance. These interventions reflect a recognition of memory chips as critical economic security assets. SK hynix controls 58% of the global high-bandwidth memory market by revenue as of Q1 2026, giving South Korea a commanding position amid fierce competition from US and South Korean rivals.
Why it matters
The persistent supply-demand imbalance for AI memory chips risks escalating into geopolitical conflicts as countries prioritize securing these key technologies to safeguard their digital economies. Chey warned that ongoing price surges could backfire by pushing up costs for device manufacturers, incentivizing new competitors to enter the market, and heightening diplomatic tensions between semiconductor-producing nations.
Normalizing prices is critical to maintain market stability; otherwise, inflationary pressures could shrink the market and invite a wave of rival entrants, as hinted by interest from prominent technology companies like Tesla. South Korea’s semiconductor industry, responsible for producing a majority of these chips, faces a delicate challenge balancing rapid capacity expansion with these broader geopolitical risks.
What to watch next
SK hynix has accelerated its domestic capacity-building efforts by moving up clean room startups to early 2027 and converting existing fabs to focus on high-bandwidth memory production. The company is simultaneously scouting global sites for future fabrication plants based on operational efficiencies rather than political incentives, maintaining a steady footprint through a $3.87 billion packaging and research facility in Indiana.
Industry watchers should monitor how government interventions evolve as memory chip shortages persist. The balance between domestic capacity expansion, international investments, and geopolitical pressures could determine the semiconductor supply chain’s stability and influence emerging global technology alliances through 2027 and beyond.