Global Memory Shortage Could Persist Until 2030 as Suppliers Prioritise AI Data Centres: Report

The ongoing global memory shortage has shaken up the consumer tech market, with the rising component costs driving up the selling prices of devices such as smartphones, laptops, gaming consoles, and more. A new report now claims that it could take until 2030 before the supply matches the demand. One of the biggest DRAM suppliers globally, SK Hynix, is reportedly planning to bring up a new fabrication plant, but it is said that the focus would be on high-bandwidth memory (HBM), which is used by artificial intelligence (AI) data centres, and not consumer devices.

Memory Shortage Could Last Years

SK Hynix's Group Chairman, Chey Tae-won, told Reuters that the ongoing crisis might not end before the end of the decade. The company, which holds a 32 percent share of the global DRAM market (second only to Samsung) and leads the HBM market with a 57 percent share, is reportedly struggling to meet the demand from AI players for their data centres.

Chey reportedly said that to meet the current demand of HBM, the company will need four to five years of time. This is primarily to stock up enough raw materials to produce the required silicon wafers. However, this production drive will only benefit the rising global AI inference demands, and not the consumer tech devices. In fact, the executive believes the shift in focus could lead to more than a 20 percent of shortage of components for the retail market.

A new Nikkei Asia report has a more optimistic outlook on when the shortage could end. As per the report, the current state of rising prices and stock depletion could continue until 2027 with efforts from the three global leaders in the space — Samsung, SK Hynix, and Micron.

Samsung is reportedly planning to add a fourth fabrication plant at its Pyeongtaek campus in South Korea this year, which will not become fully operational until the end of 2027. However, the facility is said to also focus on building logic chips for computing, which can impact the total memory production. The tech giant is also said to be constructing a fifth fabrication plant, but it is said to be focused on HBM.

Similarly, both SK Hynix and Micron are reportedly expanding fabrication of HBM, with SK's Cheongju facility already in operation and Micron planning mass production by 2027 in its Idhao and Singapore plants. But these are also not expected to impact the DRAM shortage significantly.

A Counterpoint report claims that ending the ongoing DRAM shortage would require the suppliers to increase production by 12 percent per year; however, current plans only point to an expansion of 7.5 percent, which will only marginally solve the problem.

Meanwhile, the consumer tech market is dealing with the consequences of this shortage. A report last month claimed that the cost of a 16GB LPDDR5X RAM and a 1TB UFS 4.1 storage has surpassed the cost of Qualcomm's Snapdragon 8 Elite Gen 5 chip. The cascading effect has impacted many consumer devices as well. Earlier this month, Sony raised the prices of the PlayStation 5 and the PlayStation 5 Pro consoles. The ROG Xbox Ally X also witnessed a price hike in Japan recently.

Reports have also claimed that Apple might be paying more for the memory components, which can result in the prices of this year's devices. Additionally, it is said that Vivo and iQOO phones in China could soon witness a price hike. If the shortage persists, other consumer tech brands are also likely to follow suit.