One of the largest DRAM manufacturers, SK hynix, plans to increase production by a significant level to cater to the shortages; however, it appears that demand is currently 'too high'.
SK Hynix to Scale Up 1c DRAM Production For GDDR7 & SOCAMM Modules, Likely to Target the AI Industry
We have reported on memory shortages extensively in recent days, and the supply chain is already preparing for adjustments by increasing production capacities. According to a report by the Korean media outlet Hankyung, SK hynix plans to expand its DRAM production capacity by more than eight times by 2026, to meet the requirements of CSPs and companies such as NVIDIA/AMD. It is reported that at SK hynix's Icheon campus, 1c DRAM production is expected to increase by 140,000 units per month, currently at 20,000 units, which represents a significant rise.
The capacity increase will be allocated towards products like GDDR7 modules and low-power SOCAMM memory, that has seen massive adoption over the months in AI servers. SK hynix isn't the only company looking to expand production; Samsung, Micron, and other suppliers are also proceeding rapidly to increase production numbers, as the demand for memory brought in by inference is gigantic right now.
However, it's still important to note that efforts to upscale DRAM production will be targeted entirely towards the AI industry; hence, for the consumer segment, there's still a long way ahead before shortages end. Even with the efforts DRAM suppliers are making, the demand is still far too high, as according to an earlier estimate, the datacenter buildouts occurring worldwide require DRAM inventory levels that suppliers would take years to reach.
For comparison, OpenAI's Stargate project alone is expected to utilize 900,000 DRAM wafers per month, accounting for at least 40% of the total supply at current levels. Even if Korean suppliers scramble to build capacity, we still aren't adjusting the demand expected to be driven by products such as HBM4/HBM4E, which suggests that the 'DRAM supercycle' still has a long way to go.
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