---
title: The Memory Chip Shortage Will Last Through 2030, SK hynix Says
description: SK hynix expects memory demand to outrun supply through 2030 and has sold over half its 2027-28 output on five-year contracts. How long the shortage may last.
author: Darie Nani (Editor-in-Chief)
date: 2026-10-28T10:11:30.097Z
updated: 2026-10-28T10:11:30.119Z
canonical: https://www.sovereignmagazine.com/article/how-long-will-the-memory-shortage-last
image: https://cdn.nanimediahouse.com/sk-hynix-fab-cleanroom-engineers-502287.webp
categories: Markets
content_type: News
region: Global
publication: Sovereign Magazine
schema_type: Article
---

SK hynix now expects demand for memory chips to exceed supply through 2030. The South Korean company gave the forecast on 28 October with its third-quarter results, citing the technical difficulty of leading-edge manufacturing processes and the years it takes to build new production facilities. When the shortage took hold last December, [Sovereign reported that the industry did not expect relief before 2027](https://www.sovereignmagazine.com/article/ai-s-memory-crisis-why-your-next-smartphone-might-cost-more-and-do-less).

SK hynix said it has signed long-term supply agreements with 14 major customers, including leading global cloud service providers, and that the volume they cover already equals more than half of its total production capacity for 2027 and 2028. The contracts typically run five years, and the company is discussing longer terms with several customers. Prices move within a range agreed with each customer and are adjusted to market conditions. In July, when it reported second-quarter results, SK hynix said it had concluded talks on about 10 such agreements, with purchase commitments and deposits, but its executives declined to say what share of sales they covered.

Third-quarter revenue reached 104.6155 trillion won, the first quarter in the company's history above 100 trillion won, and operating profit was 83.3338 trillion won, an operating margin of 80%. Revenue rose 32% and operating profit 38% from the second quarter, and operating profit was more than seven times its level a year earlier. Analysts surveyed by FnGuide had expected operating profit of 76.96 trillion won. SK hynix said prices of its key products rose on demand for AI memory, and that its DRAM results were driven by a sharp rise in sales of server DDR5 as shipments of HBM4, its newest high-bandwidth memory for AI processors, began in earnest. It plans about 100 trillion won of dividends and share buybacks for 2026.

SK hynix's 80% margin is above the roughly 66% that Nvidia earned in its most recent quarter, when the AI chip designer reported GAAP operating income of $63.7 billion on revenue of $96.2 billion. Samsung Electronics, whose business spans phones and televisions as well as memory, reported preliminary third-quarter operating profit of about 107.4 trillion won on revenue of about 195 trillion won earlier this month, a margin of about 55%.

## Memory Makers Are Locking Customers Into Multi-Year Contracts After Past Busts

In 2018 SK hynix made 20.84 trillion won of operating profit on revenue of 40.45 trillion won, a margin of about 52%. A year later revenue had fallen to 26.99 trillion won and operating profit to 2.71 trillion won, about 10%, which the company put down to "the increase of inventory burden and conservative purchasing policies on the side of the customers." In 2023 it posted an operating loss of 7.73 trillion won on revenue of 32.77 trillion won.

Micron Technology has 26 multi-year customer agreements with take-or-pay volume commitments, which its management estimates at more than 35% of revenue through 2030, three-quarters of it under defined pricing frameworks. Micron's customers have put up $32 billion of financial commitments, mostly cash deposits, and chief executive Sanjay Mehrotra said the agreements could eventually cover roughly 50% of revenue through 2030.

A senior analyst at Counterpoint Research said in mid-October that three- to five-year supply contracts with prepayments and price floors and ceilings could soften the industry's down cycles. TrendForce expects some suppliers' server DRAM price increases in the fourth quarter to lag the market average because of the pricing terms in their long-term agreements.

## SK hynix Will Run Its M15X Fab at Full Capacity by Year-End and Spend More in 2027

SK hynix plans to run its M15X fab at maximum capacity by the end of this year to make more HBM4, which it expects to overtake the previous generation, HBM3E, in shipments and revenue in the fourth quarter. The first phase of its Yongin site enters full operation next year, and the company expects investment to rise significantly in 2027, though it says it will adjust the scale and timing to customer demand and profitability.

## Smartphone Shipments Fell a Record 22% as Memory Costs Rose

IDC counted 255.3 million smartphones shipped worldwide in the third quarter, [down 22% from a year earlier](https://www.idc.com/resource-center/press-releases/smartphone-shipments-decline-3q26/), the steepest fall it has recorded. IDC's Nabila Popal said memory costs have risen about 350% since last year and are still climbing, and IDC expects growth to stay constrained through 2027, "with any possible recovery pushed to 2028 at the least."

> "Current indicators suggest that the market has not yet reached the bottom."
> — Nabila Popal, senior research director, IDC

Samsung raised Galaxy S26 prices by $100 in the US and South Korea this month, citing memory costs. For PCs, IDC forecast in June that 2026 shipments would fall 11.3% and average prices would rise 17%, and TrendForce says notebook sales are weaker as higher component costs show up in stock on hand.

## Analysts Expect DRAM Prices to Fall in 2028 but Stay Far Above 2025 Levels

TrendForce projects that [contract prices for conventional DRAM will rise 10% to 15%](https://www.trendforce.com/presscenter/news/20260930-13258.html) in the fourth quarter from the third, with the pace of increases slowing, and NAND flash contract prices 15% to 20%. Counterpoint Research forecasts that DRAM prices could fall about 23% in 2028 from 2027 and still be about 230% higher than in 2025, and its senior analyst described the market as having entered a "new normal."

Many analysts expect the shortage to last until 2028 rather than 2030, the Korean business outlet Digital Today reported in mid-October. SK hynix shares fell 26% and Samsung's 22% over five sessions to 15 October, CNBC reported, as investors weighed the chance of oversupply in 2029 and the expansion of CXMT, the Chinese DRAM maker. New chip plants take three to five years to build and bring into production.

## FAQ

**Q: How long is the RAM shortage likely to last?**
Forecasts run from late 2027 to 2030. IDC's Jean Philippe Bouchard said in June that IDC saw no relief before the end of 2027.

**Q: Will the memory shortage last until 2030?**
SK hynix says so. Micron expects supply to be "much tighter" in its fiscal 2027 and 2028 than in fiscal 2026, and its chief executive said more than 75% of the company's 2027 output was already committed to customers.

**Q: Will memory prices go down in 2026?**
Not in the last quarter of the year. TrendForce expects enterprise SSDs to be the only category where price rises speed up in the fourth quarter, because of demand from cloud providers, and says PC makers are still buying aggressively because they expect DRAM supply to stay tight in 2027.

**Q: Will the memory shortage be resolved?**
New capacity arrives in stages. Micron expects first wafer output from its ID1 fab in Idaho in mid-2027, from ID2 and a Japan DRAM expansion in late 2028, and from its first New York fab in 2030.

**Q: What is SOCAMM memory?**
LPDDR5 SOCAMM is a low-power memory module for AI servers. SK hynix plans to sell more of it, alongside DDR5, as part of a push toward higher-value DRAM for AI servers.