"Even Scarcer in 2028"...With Micron Joining, Supplier Advantage Grows and Memory Upcycle Continues

"Over 75% of Shipments Already Committed to Customers"
"Capacity So Full, Some Customers Can't Even Get a Meeting"
Explosive Growth in Demand Spurs Capacity Expansion

With Samsung Electronics, SK hynix, and now Micron posting record-breaking earnings, the memory market is clearly shifting in favor of suppliers. As demand for high-bandwidth memory (HBM) continues due to expanding investments in artificial intelligence (AI) data centers, supply has not kept up, boosting memory companies' pricing power and influence over their customers. As a result, expectations are growing that the upcycle in the memory industry could extend beyond 2028.

According to the semiconductor industry on October 3, Sanjay Mehrotra, Chief Executive Officer and Chairman of Micron, stated during the fiscal year 2026 fourth quarter (June to August) earnings call held on September 30 (local time) that concerns about a peak in the memory market are unfounded. He said, "We expect demand to outpace supply not only in 2027 but also in 2028, and in fact, the supply-demand imbalance is likely to worsen in 2027 and 2028 compared to 2026." He further explained that over 75% of shipment volume for the 2027 fiscal year has already been committed to customers.

This suggests that memory demand will not be limited to short-term AI investment, but will continue over the medium to long term. As customers move to preemptively secure future memory supply, memory suppliers now find themselves in a favorable position in terms of production planning and price negotiations.

Industry experts and securities analysts believe that the memory industry has already entered a full-fledged upward cycle. Notably, this uptrend is not limited to high-value-added products like HBM, but is expanding to the general-purpose memory market, including server DRAM. The surge in memory demand driven by the expansion of AI data center servers and the challenge of allocating production resources due to expanding HBM capacity is tightening the overall memory supply-demand balance.

Dahyun Kang, Research Analyst at KB Securities, analyzed, "In 2027, we anticipate an across-the-board growth phase characterized by both rising prices and increasing shipments of HBM and general-purpose memory."

The recent earnings from Samsung Electronics and SK hynix have confirmed this market trend. Samsung Electronics posted record quarterly earnings for the second quarter of 2026, with consolidated sales of 171.5 trillion won and operating profit of 89.4924 trillion won. In particular, the Device Solutions (DS) division recorded sales of 127.5 trillion won and operating profit of 89.2 trillion won, with the memory business alone achieving its highest-ever quarterly sales and operating profit. SK hynix also recorded its all-time best quarterly results, with sales of 79.3187 trillion won and operating profit of 60.5426 trillion won for the second quarter. With the relentless demand for AI memory and rising memory prices expected to continue into the third quarter, market expectations for earnings have also risen.

The expansion of AI data centers is fundamentally transforming the demand structure of the memory market. The importance of high-performance memory is increasing as large-scale AI models require more memory for training and inference, and the expansion of data center servers is boosting demand for standard server DRAM as well. This has led to a structure where HBM-driven demand growth is also impacting the supply-demand dynamics of the general-purpose DRAM market.

For memory companies, it is now crucial to secure profitability centered around high-value-added products while also responding to the rising demand for general-purpose memory. While facility investments are being made to boost supply, the long lead time from investment decision to actual mass production in semiconductor manufacturing plants makes it difficult to resolve the supply-demand imbalance in the short term.

Cheongju SK Hynix M15X. Yonhap News.

In reality, major memory manufacturers like Samsung Electronics and SK hynix are accelerating capacity (capex) expansion in light of the severe supply shortage relative to demand. Samsung Electronics expects the supply shortfall to continue through 2028 and has announced plans to expand long-term supply agreements (LTAs). The aim is to establish stable supply relationships with customers and respond proactively to demand fluctuations through long-term contracts. SK hynix is also broadening its production capacity, focusing on next-generation DRAM production facilities such as Cheongju M15X and the Yongin Semiconductor Cluster, as well as investing in new production sites like Cheongju M17, to build a stronger foundation for memory supply.

The market believes that prolonged memory supply shortages could continue to drive earnings improvements for memory manufacturers. In particular, if increasing HBM prices and shipment volumes are combined with a recovery in general-purpose memory prices, the resulting boost in profitability may extend to the entire memory business.

Going forward, the key variables in the memory market will be the sustainability of AI-driven demand growth and the timing when major manufacturers’ capacity expansions translate into actual supply increases. For now, price increases and higher shipments caused by supply shortages are likely to support improved earnings for manufacturers, but over the medium to long term, should supply growth from plant expansions outpace demand growth, the upward trend in prices may weaken. Therefore, not only the pace of production capacity expansion at Samsung Electronics and SK hynix, but also their ability to adjust supply in line with demand, will be crucial factors influencing future profitability.

An industry insider commented, "These days, our capacity is so full that we can't even meet with some customers." He went on, "As demand continues to surge, the only immediate option is to maximize supply as much as possible." He added, "Even if we expand manufacturing facilities, it will take time for actual supply capabilities to increase, so the supply-demand imbalance will likely persist for the foreseeable future."

This content was produced with the assistance of AI translation services.