The surge in demand for memory chips from the artificial intelligence market has led the industry into an upcycle of supply shortages. However, a senior industry expert suggests this situation may change in the second half of next year.
At the 285th NAEK Forum hosted by the Korean Academy of Science and Technology, Kye-hyun Kyung, former president of Samsung's semiconductor division and current permanent advisor to the Device Solutions division, stated that Chinese companies are actively expanding production capacity. He indicated that as the supply of memory chips surges, the market landscape could shift in the second half of next year or the first half of 2028.
He added that if major technology companies see a decline in their return on capital expenditure, they might reduce investments. This could lead not only to price decreases but also to a potential contraction in memory demand itself after 2028.
Furthermore, he emphasized that while South Korea holds a 70% share of the DRAM market, it accounts for only 1.5% in chip design. Unlike Taiwan, China, South Korea's complete semiconductor ecosystem, including fabless companies, is relatively fragile.
According to a report by the German tech media outlet 3DCenter, which tracks memory prices, DDR5 memory chip prices in the German market as of May have risen by 414% compared to July 2025, though they have slightly decreased since the beginning of this year.
He noted that the significant increase in memory prices has prompted large-scale capacity expansion in chip manufacturing in China. If these expansion investments succeed, the market will soon face a substantial influx of new supply, forcing memory prices to return to rational levels.
Forecasts suggest that global silicon wafer manufacturing capacity could reach six million wafers per month by the end of 2027. While end consumers would undoubtedly welcome lower prices, he warned that such rapid growth poses risks to the broader technology industry, as the surge in supply could easily turn the current shortage into a severe oversupply.
This could be a significant blow to South Korean companies currently benefiting from the memory shortage. He believes South Korea needs to increase its share in the global fabless chip design sector to remain competitive against the United States and China.
Additionally, he stressed that South Korea should independently develop advanced technologies, including memory, fabless system semiconductors, and autonomous artificial intelligence, and actively apply them to its own manufacturing strengths.