Storage Market Storage Market: Relaxation Not Expected Until 2030, Says SK Chairman Chey

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The storage crisis cannot be easily resolved, and this is not only due to the fact that storage manufacturers prefer to supply lucrative products with high demand, but also because the expansion of production abroad and the Iran conflict further exacerbate the existing bottlenecks.

Nvidia CEO Jensen Huang explained in a keynote speech at the Nvidia tech event GTC in mid-March 2026 that the demand for AI chips has increased "10,000-fold", as the increasing use of AI models - i.e. inference - is driving up the demand for computing power. What sounds like a boom is actually exacerbating the bottlenecks in the memory market.

A higher demand for AI chips goes hand in hand with a higher demand for memory products for AI chips. The AI industry offers the lure of high profits, which is why the major memory manufacturers Micron, SK and Samsung have recently focused on the production of HBM (High Bandwidth Memory).

The problem here is that products such as DRAM and NAND are also needed for AI servers, but also for other applications in the areas of industrial PCs, wearables, smartphones and automotive. However, production capacities for NAND and DRAM have been reduced in favor of HBM. As a result, overall memory production is shifting towards lower volumes but higher margins - with direct consequences for all applications outside the AI ecosystem.

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Cost Explosion Everywhere

The consequences are now clear: the cost of memory products has multiplied in many places. In discussions at Embedded World, several electronics manufacturers reported that orders have to be placed without a price guarantee or right of withdrawal if the memory is required. When the delivery then arrives, the tenor was that the current prices must be paid. There are currently no prior agreements to control the cost spiral to any extent. Products with two or three memory chips now cost twice, three times, many times more.

Even the large manufacturers can no longer bear these costs without passing them on. The large companies are lucky to be able to build up stocks. Small manufacturers cannot afford this. In the end, it boils down to this: if the customer wants the product, they have to pay for it. This in turn naturally means that prices in the end customer market rise. It's not just PC enthusiasts who are noticing this. And if the memory crisis cannot be brought under control in a timely manner, this will be noticed in many other places.

Relaxation Not Until 2030

Tae-won Chey, Chairman of the SK Group, to which memory manufacturer SK Hynix belongs, also says that the situation on the memory market will not change for some time (via Nikkei Asia). In discussions during the GTC, Chey stated that the memory chip industry would need at least four to five years to produce more wafers, and accordingly the shortage would last until 2030.

According to Chey, this easing will not be achieved any sooner by building up new production capacities overseas. The company is currently concentrating on building new fabs in South Korea. However, the bottleneck in expansion plans is not politics. "It's not about money or government subsidies, but about energy sources and water availability and whether the location has the right ecosystem," said Chey. New production facilities in South Korea do not spring up overnight either - albeit faster than in the USA. "As there are certain restrictions on the expansion of production, we will first try to stabilize the price as much as possible," said Chey in an interview with Nikkei Asia.

Conflict in the Middle East Exacerbates the Crisis

The recent outbreak of conflict in the Middle East is not helping to ease the situation on the storage market, on the contrary, says Chey. Following the attacks on Iran, the blockade of the Strait of Hormuz, a strait in the Persian Gulf through which oil and gas shipments in particular are transported, has begun.

Energy prices are rising due to the almost complete lockdown. It's not just you who are currently noticing this in the prices at the filling stations. Chey explained that the situation has "presented us with great difficulties" as energy prices have skyrocketed, adding that the group needs to find enough alternative energy sources to keep operations going. (sb)

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