Global Chip Wafer Shortage Expected to Last Until 2030

Chey Tae-won, Chairman of South Korea's SK Group, has stated that the global shortage of chip wafers is likely to persist until 2030. This prediction stems from a significant demand surge driven by advancements in artificial intelligence, which continues to outpace supply. Speaking at Nvidia's GTC Conference in San Jose, California, Chey indicated that the current wafer supply is lagging by more than 20%, with a projected shortage lasting an additional four to five years.

SK Group Chairman Says Wafer Shortage to Last Until 2030

The semiconductor market is dominated by major players including SK Hynix, Samsung Electronics Co., and Micron Technology Inc. Together, these companies control a substantial portion of the global memory chip supply. SK Hynix, in particular, holds a 57% share of the high-bandwidth memory (HBM) market and a 32% share of the global DRAM market. The shift in production focus towards specialized memory types for Nvidia's AI accelerators has contributed to a shortfall in conventional memory storage, exacerbating the supply crisis.

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The ongoing chip wafer shortage is having widespread repercussions across various industries. Rising prices for consumer electronics, vehicles, and data centers are being reported, with many experts predicting that the situation may worsen before it improves. Chey noted that this supply constraint is negatively impacting corporate profits and derailing business plans.

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Chey Tae-won emphasized that SK Hynix is exploring strategies to stabilize DRAM prices but did not disclose specific details. He also mentioned the possibility of a U.S. American Depositary Receipt (ADR) listing to broaden the company's investor base and enhance its global presence. This move is seen as a way to narrow the valuation gap with competitors like Micron Technology.

SK Group Chairman Says Wafer Shortage to Last Until 2030

Despite the optimistic outlook from SK Group, some industry analysts express skepticism regarding the feasibility of meeting the growing demand for chips. Critics argue that the current production limitations and geopolitical tensions, particularly in the Middle East affecting energy prices, could hinder efforts to ramp up manufacturing capacity.

SK Group Chairman Says Wafer Shortage to Last Until 2030

• “So we need some time to build up more wafers, at least four to five years. The current shortage could continue until 2030, so we expect more than a 20% shortage of the ?wafers,” — Chey Tae-won, Chairman of SK Group

Reuters

• “Many predict that the situation will get worse before it gets better.” — Industry Analyst

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The global chip wafer shortage, driven by surging demand for AI technologies, is projected to continue until 2030, with significant implications for various sectors. As SK Hynix and its competitors work to expand production capacity, the industry faces challenges that could prolong the crisis.

Bloomberg