ADATA Chairman Warns DRAM Shortage Will Last Another 10 Years, Says AI Bubble Talk Can Wait Until 2040

ADATA's chairman has said that there's no need to discuss the AI bubble yet since DRAM shortages will last another 10 years.

Tech Markets Have Underestimated The Global Demand For DRAM and Memory Shortages Will Last At Least 10 Years, As Per ADATA's Chairman

Following TSMC's recent stock decline after its earnings call, ADATA's chairman quickly responded to questions about whether this could be a signal of the AI bubble popping up. Chairman Chen Li-bai refuted this, and said that it's way too early to discuss anything related to an AI bubble, as that talk should only be discussed by 2030, or even 2040 or 2025.

The reason he says so is that ADATA seems to be aware of the true global demand, which the tech markets have significantly underestimated. ADATA is one of the leading memory makers, and they have seen major revenue uplifts from the current AI cycle. But according to the chairman, all of this is just the beginning.

ADATA's Chen Libai: Memory shortage will continue for another 10 years, even factory expansion can't meet demand

TSMC's stock price plummeted after its earnings call, reigniting concerns about overheated AI investment and a potential bubble. Chen Li-bai, chairman of ADATA, a leading player in the memory industry, stated that it's too early to discuss an AI bubble. He suggested, "We can discuss whether the AI ​​bubble will occur in 2040 or 2050 after 2030." 

via Commercial Times

Li-Bai states that demand for AI computing is on the rise, unlike anything that came before. There is a rise in power infrastructure, memory, storage, and other components. Electricity demand is also seeing a major spike through data centers that are coming online across the globe.

Although cloud providers such as Meta and xAI have started to lease out excess compute capacity to other firms, ADATA's chairman says that this does not mean that the demand is slowing down, but rather, future AI applications will further expand into various business models such as B2B, B2G, B2C, and B2B2C, which only means that compute demand will continue to rise, & this excess compute capacity will not last for a long time.

DRAM/NAND Expansion To Solve The Crisis Might Not Be Grounded In Reality

More interestingly, he said that in the next 10 years, the world's most scarce resources would be electricity and memory. When asked about whether the expansion of Samsung, SK Hynix, & Micron in the DRAM/NAND segments will lead to a decline in profits as low-cost inventories are exhausted, he said that major DRAM manufacturers will be very careful in bringing up new fabs and expansion projects as they understand the impact of large-scale expansion, and would rather adopt a rational and prudent expansion strategy.

These memory makers are following a multi-year expansion plan, and while lots of projects are being announced, we will have to wait and see whether they do finish on time. Most of the construction projects and expansion plans for existing production lines are planned between 2028 and 2035. DRAM manufacturers are also engaged in several long-term agreements, and even those deals promise only a portion of the supply that can be produced during a specific timeline.

ADATA's chairman has previously warned about an imminent 30% price bump in DRAM prices and a 40% bump for NAND by Q3 2026.

Others have estimated over 50% price hikes as the market remains unclear on the extent of shortages. On a short-term view, it is clear that we expect no relief on DRAM & NAND fronts till 2028, and with reports of a 10-year shortage showing up, the situation might take a long time to recover to nominal levels, but recovering to pre-shortage prices is looking out of the equation.

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