For much of the AI boom, soaring memory prices have been viewed as an unqualified win for chipmakers like SK Hynix Inc. (NASDAQ:SKHY). But the company now appears to be making a counterintuitive bet: today’s pricing power could become tomorrow’s competitive risk.
Speaking at the Korea Chamber of Commerce and Industry’s Jeju Forum, SK Group Chairman Chey Tae-won argued that the industry should focus on expanding memory supply rather than maximizing profits from the current shortage. His reasoning is simple—if AI-driven price increases begin to weigh on PC and smartphone makers, or encourage new competitors to enter the market, today’s supercycle could prove shorter than investors expect.
Why SK Hynix Wants Lower Memory Prices
Chey expects overall memory demand to rise by more than 50% to 60% next year, while AI-specific demand could climb by 60% to 100%. Despite that outlook, he described current memory prices as “abnormally high,” Business Korea reported.
The concern isn’t demand. It’s sustainability.
Cloud giants building AI infrastructure can absorb higher costs for high-bandwidth memory (HBM) and server DRAM. Consumer electronics companies have far less pricing power. If memory remains expensive for too long, PC, smartphone and gaming hardware makers could cut production, delay upgrades or pass higher costs on to consumers, ultimately slowing demand across the broader technology industry.
Instead of treating elevated prices as a victory, Chey argued that expanding production capacity quickly enough to stabilize the market is the better long-term strategy.
The Bigger Threat May Be Tomorrow’s Rivals
Chey’s comments also reveal how SK Hynix approaches competition.
Historically, tight supply has allowed memory manufacturers to enjoy stronger margins. But Chey warned that prolonged shortages create an incentive for new players to enter the market, whether through Chinese investment, government-backed initiatives or even large technology companies seeking greater control over AI infrastructure.
Rather than defending unusually high pricing, SK Hynix wants to make the economics of entering the memory business less attractive by expanding supply before competitors can establish a foothold.
In other words, sacrificing a little margin today could help preserve industry leadership tomorrow.
Why Speed Matters More Than Location
That philosophy also explains why SK Hynix is no longer asking only where to build its next semiconductor fab, but where it can build one the fastest.
“We are looking for the optimal location where we can build a fab the fastest and largest,” Chey said, adding that the company is evaluating sites globally, including the United States and South Korea.
Building a semiconductor fabrication plant takes years, while AI demand is accelerating much faster. According to Chey, virtually no manufacturer has meaningful additional memory supply available for next year, making factory construction speed one of the industry’s biggest competitive advantages.
Trade policy is also shaping those decisions. Chey acknowledged growing pressure from U.S. officials to expand domestic semiconductor manufacturing, while noting that permitting timelines, power infrastructure and government incentives have become just as important as labor costs or geography.
The AI Memory Race Is Entering A New Phase
For investors, Chey’s remarks signal a shift in how the AI semiconductor race is unfolding.
The conversation is no longer centered solely on designing faster chips or producing more HBM. It is increasingly about who can add manufacturing capacity quickly enough to keep pace with explosive demand without destabilizing the broader technology ecosystem.
If SK Hynix succeeds, it could preserve both its leadership in AI memory and the long-term health of the market it dominates. If it doesn’t, today’s record pricing may simply invite tomorrow’s competitors.
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