SK Hynix CEO: Memory chip shortage may persist beyond 2030, with more customers choosing to sign long-term contracts

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The tight supply situation for memory chips may persist for a longer period. SK Hynix CEO Kwak Noh-Jung stated that the current memory chip shortage affecting the computer, automotive, and consumer electronics markets may continue beyond 2030.

In an interview after SK Hynix completed a record-breaking American Depositary Receipt issuance, Kwak Noh-Jung said customers are signing long-term contracts because "they believe the shortage will last longer." This was also his first interview with English-language media.

Meanwhile, U.S. competitor Micron’s CEO Sanjay Mehrotra made a similar statement last month, saying “it’s still unclear when memory supply will catch up with the ever-increasing demand.”

The ongoing tight supply of memory chips is driven by the booming demand brought by the wave of AI data center construction. This supply-demand imbalance is spreading to end markets such as computers, mobile phones, and automobiles, intensifying the overall chip shortage and prompting customers to accelerate locking in long-term supply agreements.

SK Hynix rose 14.25% intraday on its first day of trading on the U.S. stock market.

Long-term contracts lock in demand as downstream manufacturers expect continued supply tightness

To hedge against the risk of future market oversupply, SK Hynix has signed more long-term supply contracts with customers. Kwak Noh-Jung pointed out that customers' actions themselves reflect market expectations—the intensive signing of long-term contracts confirms downstream manufacturers’ judgment that supply will remain tight.

Micron’s remarks further reinforced this industry consensus. Last month, Sanjay Mehrotra said during an earnings call that there is still no clear prediction of when memory supply can catch up with the pace of demand growth, a stance highly consistent with SK Hynix’s view.

For investors, the consensus among leading memory chip manufacturers that supply shortages will last for several years, coupled with sustained expansion in AI demand, means the industry’s earnings visibility is likely to remain relatively clear for a long period.

Record-breaking fundraising, moving toward the center of the U.S. AI industry

The interview took place after SK Hynix completed its fundraising. The company raised $26.5 billion through its American Depositary Receipt issuance, setting a record for the largest initial issuance of its kind by a foreign company in the U.S.

Kwak Noh-Jung stated that part of the motivation for this issuance is to establish closer partnerships with AI customers and expand access to AI talent.

He also said that establishing a memory chip manufacturing base in the U.S. is not out of the question, but the site must meet the company’s standards in terms of electricity, water resources, and talent.

“We need to move closer to the core of U.S. AI, work together more closely, grow together, and contribute to the AI ecosystem,” he said.

HBM first-mover advantage shapes the competitive landscape in the AI era

The wave of AI infrastructure construction is fundamentally reshaping the competitive landscape of the memory chip industry. As major global memory chip manufacturers, SK Hynix, Samsung Electronics, and Micron have all become important beneficiaries of the AI boom.

Large-scale capital expenditures by data center operators have driven both traditional memory chip and high-bandwidth memory (HBM) demand.

HBM is a new type of memory chip designed specifically for AI systems, and shows tremendous value when used with NVIDIA AI processors. SK Hynix entered the HBM field early on, establishing a leading position in this key sector with its first-mover advantage.

The AI infrastructure expansion led by NVIDIA has completely changed the company’s trajectory. SK Hynix originated from a restructuring rescue led by Korean creditors of LG Semiconductors and Hyundai Electronics. After years of industry cycles, the company has now achieved a significant transformation.

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