Published: 12 Mar. 2026, 05:00
The AI boom is sending memory chip demand soaring — but don't expect new supply to catch up anytime soon. Even as Samsung Electronics and SK hynix ramp up spending, the bulk of their investments are going into infrastructure and advanced packaging rather than immediate wafer output, leaving shortages likely to persist into 2027.
Korea’s two memory giants are channeling capital expenditure toward boosting manufacturing capabilities, but the industry says it will take time for the efforts to translate into meaningful relief. Much of the near-term spending is being directed toward converting existing lines to higher-end processes and expanding cleanroom infrastructure rather than immediately installing production equipment to boost wafer output. As a result, analysts say it will take time for the investments to translate into an actual wafer output increase, with significant supply relief unlikely before the second half of next year.
Demand, meanwhile, continues to surge. This year, a massive $650 billion investment in hyperscaling by U.S. companies by the likes of Microsoft, Alphabet, Meta and Amazon, AI data center construction and the release of Nvidia's new chip architecture, Vera Rubin, stand as the strongest drivers of memory consumption, underscoring the need for a significant expansion in global memory capacity.
"Memory supply growth is expected to be limited this year and next due to constrained cleanroom space across the industry," an industry source who requested anonymity said, pointing to a lack of highly controlled manufacturing space inside a chip factory where wafers are processed. "However, strong demand linked to AI is likely to keep supply shortages persistent."
Industry forecasts point to a booming semiconductor market. World Semiconductor Trade Statistics (WSTS) projects the global chip market will reach about $975 billion this year, up 25 percent from a year earlier. But analysts at Hyundai Motor Securities contend that the estimate may be conservative, predicting the market could climb to $1.3 trillion by 2026.
“Given the sharp surge in memory semiconductor prices, it is believed that the WSTS estimate is overly conservative,” the brokerage said in a Feb. 27 report, adding that memory chips could account for more than 40 percent of the total market, an all-time high share.
Supply, however, remains constrained. According to the report, new fabrication capacity in Korea is unlikely to come online until the second half of 2027, meaning tight supply conditions will persist throughout the first half of next year.
A separate report by SK Securities highlighted exactly the same constraint: limited cleanroom space. The firm said capacity expansion remains restricted by a lack of available cleanroom square footage, with new fabs expected to be completed in the first half of 2027 and large-scale equipment investment beginning later that year.
Once those facilities are ready, the two Korean memory makers are expected to increase production significantly.
“By that time, each company is projected to have enough cleanroom space to support an additional capacity of 150,000 wafers per month,” the report said.
Korean fab buildout timeline
This year, Samsung is prioritizing the conversion of its lines to memory chips at its Pyeongtaek campus in Gyeonggi and the acceleration of new facility construction at the site.
At the P4 plant, the company is upgrading dynamic random-access memory (DRAM) production to its latest 1c process, which will be used for high bandwidth memory (HBM) and advanced DRAM chips. Samsung aims to secure 1c capacity of more than 200,000 wafers per month by the end of the year through line conversion and additional equipment installation.
Construction of P5, which had previously been delayed during the semiconductor downturn, resumed this year with a timeline accelerated by roughly six months compared to earlier plans. The chipmaker is bringing in tens of thousands of new workers to construct the megafab, capable of producing HBM, DRAM, NAND flash and potentially foundry chips. Construction is expected to be completed in the first half of 2027, with equipment installation beginning shortly afterward and mass production targeted for the latter part of 2028.
Construction of the last Pyeongtaek facility, P6, is currently expected to start in the third quarter of 2028.
SK hynix is currently concentrating short-term investment on expanding capacity at its M15X fab in Cheongju, North Chungcheong, while also upgrading older lines.
The company is adding 1b DRAM capacity at M15X, while accelerating 1c node conversions at its M14 and M16 fabs for production of HBM and server DRAM. After hitting a capacity of 10,000 wafers per month last year, it is expected to expand capacity by up to 70,000 wafers per month this year.
For a new greenfield project, SK hynix is advancing construction at the Yongin semiconductor cluster in Gyeonggi, one of the largest semiconductor manufacturing projects globally. The cluster will ultimately host six Samsung fabs from Samsung and four SK hynix facilities, and the latter is moving ahead first.
Construction of the first fab, Y1, is expected to be completed in February of next year, earlier than previously planned. Equipment installation is scheduled to begin in the second quarter of 2027.
Y1 will be built in six cleanroom "phases," a unit used in fab construction for the capacity expansion stage. Each phase adds more floor space and related equipment for wafer capacity expansion. The first three phases are expected to begin operation within the same year, providing a capacity of 150,000 wafers per month, with the remaining phases adding another 150,000 wafers per month once fully operational.
The second fab in the cluster, Y2, is expected to begin construction around the third quarter of 2028.
In addition, SK hynix plans to invest 19 trillion won ($13 billion) in P&T7, an advanced packaging facility in Cheongju for memory chips. Construction is expected to start next month, with completion targeted for the end of next year.
Cash boost for capacity expansion
Samsung and SK hynix are expected to increase their domestic semiconductor capital expenditures by 30 percent on year, backed by their strongest cash reserves in several years amid robust demand, according to Semiconductor Equipment and Materials International (Semi). As supply shortages persist and production ramp-ups continue this year, the companies are expected to have sufficient cash to reinvest in research and development and expand manufacturing capacity.
Total semiconductor fab investment in Korea, including on equipment and facilities, is projected to reach $35 billion this year, up 29.6 percent from $27 billion last year, according to Semi. The organization expects spending to remain elevated for the next several years, reaching $38 billion in 2027 and $37 billion in 2028.
Clark Tseng, a director at Semi, projected a rapid surge in chip investment in Korea, led by Samsung and SK hynix, at a press briefing by Semicon Korea, a global semiconductor industry trade show held annually in Seoul, in February. He added that global DRAM capacity is expected to grow at an average annual rate of 4.8 percent through 2030, reaching about 2 million 12-inch wafers per month.
An SK hynix audit released on March 5 said that the company’s cash and cash equivalents totaled 34.94 trillion won at the end of last year, more than doubling from 14.16 trillion in 2024.
Samsung, meanwhile, reported 126.9 trillion won in cash and cash equivalents last year, up 11.7 percent from the previous year. Net cash — cash and equivalents minus borrowings — also rebounded above 100 trillion won for the first time in three years since 2022.
BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]
The AI boom is sending memory chip demand soaring — but don't expect new supply to catch up anytime soon. Even as Samsung Electronics and SK hynix ramp up spending, the bulk of their investments are going into infrastructure and advanced packaging rather than immediate wafer output, leaving shortages likely to persist into 2027.
Korea’s two memory giants are channeling capital expenditure toward boosting manufacturing capabilities, but the industry says it will take time for the efforts to translate into meaningful relief. Much of the near-term spending is being directed toward converting existing lines to higher-end processes and expanding cleanroom infrastructure rather than immediately installing production equipment to boost wafer output. As a result, analysts say it will take time for the investments to translate into an actual wafer output increase, with significant supply relief unlikely before the second half of next year.
Demand, meanwhile, continues to surge. This year, a massive $650 billion investment in hyperscaling by U.S. companies by the likes of Microsoft, Alphabet, Meta and Amazon, AI data center construction and the release of Nvidia's new chip architecture, Vera Rubin, stand as the strongest drivers of memory consumption, underscoring the need for a significant expansion in global memory capacity.
"Memory supply growth is expected to be limited this year and next due to constrained cleanroom space across the industry," an industry source who requested anonymity said, pointing to a lack of highly controlled manufacturing space inside a chip factory where wafers are processed. "However, strong demand linked to AI is likely to keep supply shortages persistent."
Industry forecasts point to a booming semiconductor market. World Semiconductor Trade Statistics (WSTS) projects the global chip market will reach about $975 billion this year, up 25 percent from a year earlier. But analysts at Hyundai Motor Securities contend that the estimate may be conservative, predicting the market could climb to $1.3 trillion by 2026.
“Given the sharp surge in memory semiconductor prices, it is believed that the WSTS estimate is overly conservative,” the brokerage said in a Feb. 27 report, adding that memory chips could account for more than 40 percent of the total market, an all-time high share.
Supply, however, remains constrained. According to the report, new fabrication capacity in Korea is unlikely to come online until the second half of 2027, meaning tight supply conditions will persist throughout the first half of next year.
A separate report by SK Securities highlighted exactly the same constraint: limited cleanroom space. The firm said capacity expansion remains restricted by a lack of available cleanroom square footage, with new fabs expected to be completed in the first half of 2027 and large-scale equipment investment beginning later that year.
Once those facilities are ready, the two Korean memory makers are expected to increase production significantly.
“By that time, each company is projected to have enough cleanroom space to support an additional capacity of 150,000 wafers per month,” the report said.
Korean fab buildout timeline
This year, Samsung is prioritizing the conversion of its lines to memory chips at its Pyeongtaek campus in Gyeonggi and the acceleration of new facility construction at the site.
At the P4 plant, the company is upgrading dynamic random-access memory (DRAM) production to its latest 1c process, which will be used for high bandwidth memory (HBM) and advanced DRAM chips. Samsung aims to secure 1c capacity of more than 200,000 wafers per month by the end of the year through line conversion and additional equipment installation.
Construction of P5, which had previously been delayed during the semiconductor downturn, resumed this year with a timeline accelerated by roughly six months compared to earlier plans. The chipmaker is bringing in tens of thousands of new workers to construct the megafab, capable of producing HBM, DRAM, NAND flash and potentially foundry chips. Construction is expected to be completed in the first half of 2027, with equipment installation beginning shortly afterward and mass production targeted for the latter part of 2028.
Construction of the last Pyeongtaek facility, P6, is currently expected to start in the third quarter of 2028.
SK hynix is currently concentrating short-term investment on expanding capacity at its M15X fab in Cheongju, North Chungcheong, while also upgrading older lines.
The company is adding 1b DRAM capacity at M15X, while accelerating 1c node conversions at its M14 and M16 fabs for production of HBM and server DRAM. After hitting a capacity of 10,000 wafers per month last year, it is expected to expand capacity by up to 70,000 wafers per month this year.
For a new greenfield project, SK hynix is advancing construction at the Yongin semiconductor cluster in Gyeonggi, one of the largest semiconductor manufacturing projects globally. The cluster will ultimately host six Samsung fabs from Samsung and four SK hynix facilities, and the latter is moving ahead first.
Construction of the first fab, Y1, is expected to be completed in February of next year, earlier than previously planned. Equipment installation is scheduled to begin in the second quarter of 2027.
Y1 will be built in six cleanroom "phases," a unit used in fab construction for the capacity expansion stage. Each phase adds more floor space and related equipment for wafer capacity expansion. The first three phases are expected to begin operation within the same year, providing a capacity of 150,000 wafers per month, with the remaining phases adding another 150,000 wafers per month once fully operational.
The second fab in the cluster, Y2, is expected to begin construction around the third quarter of 2028.
In addition, SK hynix plans to invest 19 trillion won ($13 billion) in P&T7, an advanced packaging facility in Cheongju for memory chips. Construction is expected to start next month, with completion targeted for the end of next year.
Cash boost for capacity expansion
Samsung and SK hynix are expected to increase their domestic semiconductor capital expenditures by 30 percent on year, backed by their strongest cash reserves in several years amid robust demand, according to Semiconductor Equipment and Materials International (Semi). As supply shortages persist and production ramp-ups continue this year, the companies are expected to have sufficient cash to reinvest in research and development and expand manufacturing capacity.
Total semiconductor fab investment in Korea, including on equipment and facilities, is projected to reach $35 billion this year, up 29.6 percent from $27 billion last year, according to Semi. The organization expects spending to remain elevated for the next several years, reaching $38 billion in 2027 and $37 billion in 2028.
Clark Tseng, a director at Semi, projected a rapid surge in chip investment in Korea, led by Samsung and SK hynix, at a press briefing by Semicon Korea, a global semiconductor industry trade show held annually in Seoul, in February. He added that global DRAM capacity is expected to grow at an average annual rate of 4.8 percent through 2030, reaching about 2 million 12-inch wafers per month.
An SK hynix audit released on March 5 said that the company’s cash and cash equivalents totaled 34.94 trillion won at the end of last year, more than doubling from 14.16 trillion in 2024.
Samsung, meanwhile, reported 126.9 trillion won in cash and cash equivalents last year, up 11.7 percent from the previous year. Net cash — cash and equivalents minus borrowings — also rebounded above 100 trillion won for the first time in three years since 2022.
BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]
Samsung and SK are expanding fast, but why is memory still in short supply?
The AI boom is sending memory chip demand soaring — but new supply won’t likely catch up anytime soon, with Samsung Electronics and SK hynix focusing investment on infrastructure and advanced packaging rather than wafer output.
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