SK Hynix to Double Chip Production to Combat AI Shortage

SK Hynix Inc. intends to double its memory chip production capacity over the next five years to address a global supply deficit fueled by the artificial intelligence boom. Chey Tae-won, chairman of SK Group, announced the plan in Taipei, warning that a shortage of essential storage chips is likely to persist until 2030.

The company is increasing capital expenditure to resolve the demand-supply imbalance, though Chey noted that volatile costs for land, electricity, and equipment, alongside long lead times for greenfield projects, complicate the expansion. The industry-wide shortage has created a bottleneck for AI development and raised costs for consumer hardware, while simultaneously pushing the market valuations of SK Hynix and Micron Technology Inc. beyond $1 trillion.

To finance the production ramp-up, SK Hynix has filed to list American depositary receipts to attract investment from Wall Street. The move comes as industry leaders, including the CEO of Arm, identify memory availability as the primary constraint currently hindering global AI progress.