With the memory chip market being significantly disrupted due to high demand from the artificial intelligence market, advisor to Samsung Electronics, Kye-hyun Kyung, believes that prices will come down in the second half of next year. Kyung previously served as the head of Samsung's Device Solutions (DS) group, which is the firm's chip and display manufacturing business division. The former executive believes that high investment by China in the memory market will be responsible for the lower prices and adds that Korea needs to expand its presence in the global fabless chip fabrication market in order to remain competitive with the US and China.
Aggressive Chinese Production Capacity Expansion Could Lead To Memory Supply Surge, Says Former Samsung Executive
The booming demand for AI chips and the key role played by high-bandwidth memory (HBM) in it have led to a surge in global memory prices. Even though the highest-performing AI chips require HBM, the market shortage has also affected prices for other memory chips, such as DDR5, due to reallocation of production capacity.
For instance, as of May, memory prices in Germany are up by a whopping 414% for DDR5 chips compared to the prices from July 2025. The high prices have also affected the personal computing market with companies such as Apple and Dell experiencing a jump in shipments due to preemptive ordering ahead of the high prices' impact on the market.
Memory Production Capacity Investments Depend On Mega Cap CapEX Returns, Warns Former Executive
Amidst this turmoil, the former head of Samsung's DS Group, Kye-hyun Kyung, believes that memory prices can fall starting from the second half of next year. Speaking at the 285th National Academy of Engineering of Korea (NAEK) Forum, the former executive remarked that Chinese companies are investing aggressively to boost their memory chip production. According to him, if these investments are successful and lead to an increase in output, then the surge in supply could cause prices to fall a year from now in the second half of next year.
Kyung's remarks come as Chinese firms start to increase their presence in the DDR5 market. The largest player in the Chinese DRAM market, ChangXin Memory Technologies (CXMT), is believed to be leading the charge. Other players, such as Jiahe Jinwei, are also making an impact.
Kyung cited data from market research firms to point out that production capacity in H2 2027 could sit at six million wafers per month. However, he cautioned that the production investments could drop if mega technology firms see their return on investment on AI capital expenditure drop.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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