SK Hercules will double the capacity of the core memory in five years.

The chairman of the SK Group (the holding parent of SK Hercules) also went to Taipei's International Computer Fair today, where, in an interview with the media, Choi Taegen revealed that SK Hercules would double his memory capacity in five years, although Choi Thaigen also reiterated his earlier prediction that the artificial intelligence-driven memory market shortage would not be alleviated until 2030.

The shortage of memory cannot be alleviated in the short term:

In terms of SK Hercules’s own schedule of plans, Choi Tae-jin’s commitment has had little effect on the reduction of energy stress, mainly because of the very long construction cycle of the Crystal Circle plant, which according to Choi Tae-won, has been building a new Crystal Circle plant for more than five years, and it is true that the memory shortage will not be alleviated until 2030, when the round capacity in the market has grown significantly.

However, as the cost of land, the cost of equipment and the price of electricity fluctuated and the cost of construction of the round mill was difficult to determine, Choi Tae-jin was unable to reveal how much investment would be required for the construction of a new round factory. SK Hercules's existing memory crystal circle is close to saturation, and therefore even large clients have offered to purchase SK Hercules' EUV and prepaid the cost of the CLPP in exchange for additional memory supplies, although Choi Tae-jin did not disclose whether SK Hercules eventually entered into a similar agreement with his client.

Market demand for HBM-series memory is too high:

The current market-wide supply deficit is due to the rapid development of the artificial intelligence industry, which requires large HBM series high bandwidth memory for training and operating models, while the number of crystals required for HBM series memory is much higher than the standard DRAM, and of course the HBM memory profit margin is much higher than the standard DRAM, so suppliers throughout the industry are shifting their products to HBM3 etc.

This situation has also led to a very limited supply of standard DRAM for ordinary consumers, with the immediate consequence that standard DRAM prices are rising at an alarming rate, with negative effects on the whole industry, such as the introduction of lower memory for smarts and laptops, which should now start at 16 GB if not for memory constraints.

According to a report issued by the Commonwealth Consulting, the price of the 26Q1 memory contract increased 95 per cent and the price of the 26Q2 memory contract increased by 63 per cent as a whole. DDR4 spot prices have indeed fallen in the recent past, although within the DDR4 they have increased by up to 220 per cent over a 12-month period, and the Commonwealth Advisory believes that the market outlook will remain unchanged for the next five years even if production capacity doubles.