SK Hynix Chairman Chey Tae-won: Most Severe "Memory Shortage" Coming Next Year as AI Demand Nearly Doubles

 

In an exclusive interview at the company's South Korea headquarters on Thursday, SK Hynix Chairman Chey Tae-won reiterated the explosive surge in memory demand, warning that the market will face its most severe "memory shortage" next year.

 

Chey also affirmed the indispensable role of key partner Nvidia in the AI infrastructure boom while brushing off concerns regarding SK Hynix's reliance on a single customer.

AI Customer Demand Nearly Doubles

Demand for memory across the AI ecosystem has far outstripped SK Hynix's current supply capacity.

 

"Demand right now is explosive," Chey said. "All of my customers are asking for nearly double their original order volumes."

 

He noted that expanding production capacity could take four to five years, describing the scramble among tech giants for memory chips as "resembling a war."

 

Without sufficient memory, clients "simply cannot manufacture AI compute hardware or AI accelerators," he added.

 

Chey highlighted that as demand for AI servers continues to surge, High Bandwidth Memory (HBM) remains severely constrained, prompting several tech giants to fly directly to South Korea to secure long-term supply agreements in advance.

 

Warning of intensifying supply pressures, Chey cautioned that next year could witness the most severe memory deficit on record.

 

Drawing an analogy, Chey likened today's AI industry to a four-year-old child, noting that memory demand will scale exponentially as the sector matures. He projected that AI agent usage could grow 77-fold over the next five years.

Pushing Back Against "Over-Reliance on Nvidia"

Chey emphasized that Nvidia remains vital to AI infrastructure development, stating, "Without Nvidia, the AI ecosystem as we know it would not exist."

 

He praised Nvidia CEO Jensen Huang for building an expansive partner ecosystem rather than going it alone, calling the collaborative strategy key to Nvidia's dominance.

 

While acknowledging Nvidia as SK Hynix's "most important customer," Chey dismissed concerns that the memory maker is overly dependent on a single buyer.

 

"Nvidia is currently our most critical partner," Chey said, adding, "I remain confident they will continue to hold a dominant position moving forward."

 

Addressing market skepticism over customer concentration, Chey pointed out that SK Hynix also supplies major hyperscalers including Google, Microsoft, and other cloud giants.

 

"We aren't tied to a single customer; our goal is simply to serve the world's largest platforms," he explained.

 

To Chey, Nvidia's dominance serves as a powerful catalyst driving SK Hynix's HBM demand rather than representing a concentration risk.

 

In practice, Nvidia is equally reliant on SK Hynix to supply the advanced HBM required for its AI platforms. Financial commentator Jim Cramer recently put it bluntly, stating that the tech industry effectively "has its fate held in SK Hynix's hands."

 

Shares of SK Hynix rallied sharply in South Korean trading on Friday. Despite a pullback last month, the stock has surged nearly fivefold over the past year, riding the tailwinds of the global AI boom.