SK Hynix to double wafer capacity in five years amid AI boom

SK Hynix Plans to Double Wafer Capacity in Five Years as AI Demand Strains Global Supply

SK Group Chairman Chey Tae-won announced on Tuesday that SK Hynix will double its memory chip wafer production capacity over the next five years, one of the most ambitious expansion plans in the semiconductor industry’s history as artificial intelligence demand reshapes global supply dynamics.

“We are going to double the whole capacity over the next five years … there are a lot of obstacles and hurdles, but we will get over them and expand,” Chey told reporters at the Computex conference in Taipei, according to Reuters.reuters

A Structural Shortage Through 2030

The expansion plan follows Chey’s earlier warning in March that a global chip wafer shortage would persist until at least 2030. Speaking at Nvidia’s GTC Conference in San Jose in March, the chairman said the industry faces a wafer deficit of more than 20%, driven by insatiable AI demand for high-bandwidth memory chips.reuters

“AI has a significant demand for HBM, and producing HBM requires a substantial number of wafers,” Chey explained at the time, noting that securing additional wafer production capacity takes at least four to five years.reuters

Goldman Sachs reinforced this outlook in a note published on June 1, describing the coming years as potentially the deepest memory shortage on record. The bank forecasts DRAM undersupply of 5.0% in 2026 and 5.9% in 2027, with tightness extending into 2028. Goldman raised its 12-month price target on SK Hynix by 94% and lifted its target on Samsung Electronics by 50%.benzinga

Taiwan Partnerships and Nvidia Ambitions

Chey also signaled plans to deepen SK Group’s partnerships in Taiwan beyond its existing relationship with TSMC. According to Yonhap News Agency, Chey described the trilateral partnership between SK Hynix, Nvidia, and TSMC as “greater than ever”, while also seeking to diversify collaborations across Taiwan’s broader semiconductor ecosystem.tradingkey

The chairman said SK Hynix aims to become Nvidia’s primary HBM supplier for its next-generation Vera Rubin AI computing platform. SK Hynix currently dominates the HBM market and reported record operating profit of 37.6 trillion won in the first quarter of 2026.binance

Goldman Sachs estimates that HBM requires three to four times more wafer capacity than traditional DRAM, limiting the industry’s ability to rapidly scale supply. The bank now expects the HBM market to reach $168 billion by 2028.benzinga