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SK hynix expects memory shortage to last through 2030
SK hynix expects demand for memory to outstrip supply through 2030. The Korean memory maker has already secured long-term agreements covering more than half of its production capacity for 2027 and 2028, and reported record revenue of KRW 104.6 trillion (about EUR 70.2 billion) in the third quarter.
Revenue rose 32% from the previous quarter and more than quadrupled year on year, according to a press release from SK hynix. It was the first time the company’s quarterly revenue had passed KRW 100 trillion. Operating profit reached KRW 83.3 trillion (about EUR 55.9 billion), giving an operating margin of 80%. Growth was driven by a sharp increase in sales of server DDR5, as HBM4 shipments began in earnest. In NAND, sales of 321-layer TLC eSSDs for data centres grew.
SK hynix says supply isn’t keeping pace with demand. Leading-edge processes are technically difficult, and new fabs take a long time to build. That’s why the company expects demand to exceed supply through 2030. In the short term, demand is being driven by AI for businesses and consumers, and in the longer term by physical AI, such as autonomous driving and robotics.
To lock in that demand, SK hynix has signed long-term agreements with 14 major customers, including the large cloud service providers. The agreements typically run for five years and use a pricing mechanism that reflects market conditions within a range agreed with each customer.
“The customer trust built through our technological competitiveness is leading to long-term contracts, and our business structure is transforming into one with earnings stability and mid-to-long term demand visibility,” says CEO Kwak Noh-Jung.
SK hynix will ramp up its M15X fab to full capacity by the end of the year to increase HBM4 production, and expects HBM4 to overtake HBM3E in both volume and revenue in the fourth quarter. Investment is set to increase significantly next year, when the first phase of the Yongin cluster goes into full-scale operation. The company also says it will adjust the scale and timing of the investment flexibly.
SK hynix has also dropped plans for an IPO of its NAND subsidiary Solidigm. The listing was intended to raise external capital for Solidigm’s production expansion, but the company says current market conditions make it the wrong time.
