Is this the news we’ve all been waiting for? An end to the memory crisis? Possibly. No lesser an authority than the former president of Samsung Electronics’ semiconductor division says that memory prices could fall starting in the second half of next year thanks to a “surge” in manufacturing capacity in China.
Speaking at the National Academy of Engineering in Seoul, South Korea (via Wccftech), Kyung-Hyeon Kye said, “Chinese companies are aggressively expanding their production capacity.” The result will be a “surge” in memory supply in the second half of 2027 or early 2028.
What’s more, he warned that not only will memory supply increase, but demand could decline after 2028. “If the return on investment for Big Tech decreases relative to capital investment, there is a possibility of reduced investment,” Kyung-Hyeon Kye said. Korea must therefore prepare for the “post-super boom.”
His argument seems to be that demand for memory chips could tail off if the AI industry doesn’t start making money rather than just spending it. Ironically, this raises the prospect of the memory crisis being followed by the mother of all memory gluts.
As we’ve reported before, the major players in memory manufacturing outside of China are in the midst of increasing manufacturing capacity. China, by this account, is set to add dramatically to that capacity.
PC memory kits prices are around three to four times higher than a year ago. (Image credit: G.Skill)
If the AI bubble goes pop and the huge added demand for memory chips suddenly goes with it, there will be an awful lot of memory capacity looking for customers.
Perhaps the AI bubble actually bursting is too pessimistic a scenario. But a significant scaling back of current investment plans from the industry seems plausible. And even that could see the supply-and-demand ratio shift pretty dramatically.
Even if this is all accurate, we still have a year or more to sit out before memory pricing begins to return to normal. So, there’s a ways to go yet. But the prospect of vaguely sensible PC build costs being a thing again is still good news. Here’s hoping.
