SK Hynix Sees AI Demand Driving Memory Shortage Into 2030s
Synopsis
The chipmaker forecasts persistent supply constraints as demand for memory chips continues to outstrip production capacity.
Key Highlights
- SK Hynix memory shortfall 2027 warning.
- The US 26.5 billion share sale that came Tuesday was more than seven times oversubscribed before the SK Hynix Nasdaq IPO.
- As per SK Hynix CEO, memory demand and supply will fall short of 2030.
After continuing its planned liquidation by disposing of $458 million in common stock, SK Hynix’s memory shortage 2027 remained in focus, as the South Korean chipmaker listed on Nasdaq on July 10 and CEO Kwak Noh-jung warned on stage that the industry is headed for its worst-ever memory supply shortage at this point.
After its US$26.5 billion SK Hynix Nasdaq IPO in the States, the company saw U.S.-listed shares rise 14%, which shows that investors remain focused on AI-related chipmakers.
Strong Demand Drives Nasdaq Debut
SK Hynix common shares were trading at an open of US$170 on the NYSE’s American depositary receipts compared with the US$149 per-share offer price. The price of the offer equated to a premium of 2.7% over the average share price over those previous three trading days in Seoul.
The company said the new offering will help pay for new factories, and enter a broader universe of the biggest potential investors. The share sale was oversubscribed more than seven times.
AI Demand Supports Memory Market
SK Hynix is the biggest producer of high-bandwidth memory (HBM) chips that go into AI graphics processors for Nvidia and AMD. Even after falling about 25% from its record high two weeks ago, SK Hynix shares remain some 630% higher year-on-year.
SK Group Chairman Chey Tae-won stated the company could provide memory-as-a-service to solve memory bottlenecks related to AI and plans to secure 5 gigawatts of AI data centre capacity outside South Korea. He said the company continues to be receptive to additional U.S. investments.
Industry Watches AI Spending
The listing could help shrink the valuation gap between SK Hynix and U.S. peer Micron by broadening its investor base, analysts said. SK Hynix is trading at 5.8 times forward earnings, according to LSEG data, compared with 7 for Micron.
A note from BofA Securities projected that overall global cloud and AI infrastructure capex would reach US$1.5 trillion by 2027 while analysts said investors were still debating whether hyperscalers could hold the current AI spending levels.
Source: Reuters
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