A leading Samsung executive adviser cautions that China’s aggressive increase in chipmaking capacity, combined with slowing investment from global tech giants, could weaken the booming memory chip market by 2028.
- Chinese chipmakers plan major capacity expansions over three years
- Memory chip demand may slow as tech investment tapers by 2028
- Samsung faces a possible labor strike amid strong industry earnings
What happened
Kyung Kye-hyun, former head of Samsung’s semiconductor division and current adviser, highlighted China’s rapid growth in chip manufacturing as a significant threat to South Korea’s dominant memory chip industry. Chinese firms have already gained around 20% of the NAND flash market and are increasing DRAM production through subsidies and cost advantages.
Chinese companies like ChangXin Memory Technologies (CXMT) are projecting substantial revenue growth, with CXMT reporting a 719% year-on-year jump in first-quarter revenues to 50.8 billion yuan (US$7.4 billion) and forecasting continued gains in the first half of 2026. Over the next three years, Chinese firms aim to add 300,000 wafers of capacity, potentially capturing up to 13% of the DRAM market.
Why it matters
Memory chips are critical components for AI data centers, driving current demand and profitability for South Korean companies like Samsung and SK Hynix. However, the expanding Chinese production capacity puts downward pressure on prices and market share for these established players.
In addition to supply-side challenges, there is concern that memory demand could slow beginning in 2027 or 2028 as large tech firms reduce capital expenditure in response to diminishing returns on investment. Furthermore, evolving AI hardware architectures shifting away from Nvidia GPUs towards customized accelerators could require new memory solutions, adding complexity to market dynamics.
What to watch next
Market observers should monitor how quickly Chinese chipmakers increase their production capacities and whether they sustain aggressive pricing strategies to gain market share in NAND and DRAM segments. The pace of demand growth or contraction from major AI service providers will also be key.
Samsung’s potential labor strike, slated to occur between May 21 and June 7 and involving approximately 50,000 workers, could disrupt global memory supply chains. Analysts predict this could reduce NAND and DRAM supplies by several percentage points, potentially driving prices higher in the short term.