SK hynix says memory supply 'must be expanded' to save the consumer tech market and prevent 'chipflation'

Q: What risks did SK hynix warn about if memory prices keep increasing without new factories?

SK hynix warned that continued price increases without new factories would drive "chipflation," forcing PC and smartphone makers to pass rising semiconductor costs onto consumers and shrinking the consumer market. The company said the market could contract and invite new entrants, specifically Chinese memory manufacturers like CXMT, and described the 2027 outlook as potentially chaotic.

'Since most customers for these products are individuals, there are limits to how much prices can be raised,' SK hynix on the memory crisis for consumers.

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Kosta Andreadis

Senior Editor

Published Jul 19, 2026 11:31 PM CDT

1 minute & 15 seconds read time

TL;DR: SK hynix warns that surging DRAM demand and prices-driven by data center and AI needs-are harming the consumer tech market; Chairman Chey Tae-won urges rapid supply expansion, smaller margins, and new fabs (including potential U.S. sites) to prevent "chipflation" and market shrinkage.

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SK hynix, alongside Samsung and Micron, is one of the big three in memory manufacturing. And with the insatiable demand for memory from the data center and AI market, which has led to an exponential increase in pricing, it's now one of the most successful and lucrative companies in the world, thanks to the DRAM crisis.

SK hynix says memory supply 'must be expanded' to save the consumer tech market and prevent 'chipflation' 1

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With the demand and price increases not showing any sign of slowing down, to the point where the consumer technology market is now in a state of unprecedented crisis, there is a limit and a negative side to the high prices and record profits for SK hynix. SK Group Chairman Chey Tae-won, the parent company of SK hynix, shared this concern at the recent 'Korea Chamber of Commerce and Industry Summer Forum.'

"Memory prices are currently at an abnormally high level," Chairman Chey Tae-won said during a press conference. "While AI companies can absorb increased costs through investments, PC and smartphone manufacturers have no choice but to pass rising semiconductor costs onto product prices." Seeing SK Group acknowledge the effect the DRAM crisis is having on the consumer technology market is good news, even if the solution boils down to more supply, which would take years.

Read more: Sound the alarm, DRAM shortage and memory crisis could last until 2030
Read more: SK hynix says it will triple its memory chip production and output by 2034

"Since most customers for these products are individuals, there are limits to how much prices can be raised," Chairman Chey Tae-won adds. "To prevent 'chipflation' - where rising chip prices drive up finished product costs - supply must be expanded."

Chairman Chey Tae-won is definitely taking the situation seriously, as he also suggested that memory makers should consider smaller profit margins to help protect the market and ensure more sustainable growth. He also notes that increasing prices indefinitely without building new factories will cause the market to shrink and "new players" to enter, namely Chinese memory manufacturers like CXMT. And when it comes to 2027, the outlook is bleak, with the chairman describing it as "so dire I don't know if I should describe it as chaotic."

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Question #1

How does SK hynix say high DRAM prices are affecting PC and smartphone manufacturers?

SK hynix says AI companies can absorb higher DRAM costs through investments, but PC and smartphone manufacturers have no choice but to pass rising semiconductor costs onto product prices. Because most customers for these products are individuals, there are limits to how much prices can be raised, risking "chipflation" where rising chip prices drive up finished product costs, so SK hynix urges expanding supply.

Answered

Question #2

What timeline or obstacles did SK hynix outline for expanding memory manufacturing capacity?

SK hynix said expanding supply "would take years" as new factories are being fast-tracked but will mostly be allocated to the AI sector, limiting near-term relief for consumer markets. The company is scouting global sites, including the U.S., and said every viable site must be identified, prioritized, and developed swiftly, but did not give a specific completion timeline.

Answered

Question #3

Is SK hynix planning to prioritize new factory output for AI/data center customers over consumer products?

Yes. The article states that although new factories are being expanded and fast-tracked, "for the most part, this capacity will also be allocated to the AI sector," indicating new output will be prioritized for AI/data center customers over consumer products. The chairman also said SK hynix is scouting global sites, including the U.S., to build capacity quickly.

Answered

Question #4

What risks did SK hynix warn about if memory prices keep increasing without new factories?

Have a question not listed here? Ask below and TweakBot will answer it.

Of course, with the unprecedented demand for DRAM, all the big memory makers are expanding and fast-tracking the construction of new factories; however, this will take time, and for the most part, this capacity will also be allocated to the AI sector. And it's gotten to the point where SK hynix is considering expanding its semiconductor manufacturing to the U.S. "We are currently scouting locations," Chairman Chey Tae-won said. "Every viable site worldwide must be identified, prioritized, and developed swiftly to determine where we can build the fastest, largest, and most efficiently."