SK Group Warns Chip Wafer Shortage Could Last Until 2030 Amid AI Boom

Recently, the chairman of SK Group, Chey Tae-won, warned about global semiconductor supply challenges, including a shortage of chip wafers. At the NVIDIA GTC Conference in California, he demonstrated how the rapid growth of AI is increasing demand from chip manufacturers.

Furthermore, Chey also illustrated how the requirement of advanced memory is increasing, most significantly, the high-bandwidth memory (HBM). This high demand is increasing the pressure on the wafer supply. In the AI manufacturing domain, HBM plays a crucial role and is used by companies such as NVIDIA. 

Chey also explained that expanding wafer production is not a solution, as building new manufacturing capacity requires a lot of investment and skilled labour. Resultantly, these fluctuations in supply and demand might remain the same, causing shortages exceeding 20% in the upcoming years.

While further addressing these challenges, SK Hynix, a well-known player in the global memory market, illustrated strategies to stabilize DRAM processes. To attain the attention of international investors, the company is considering a US American Depositary Receipt (ADR). 

Currently, the companies are focusing on improving domestic production capabilities and not investing in expanding production overseas. This is due to multiple factors such as power, water, and construction resources. Moreover, they also find it difficult to quickly build facilities outside South Korea. 

The geopolitical tensions are also impacting the energy costs, thus giving rise to prices, resulting in making companies like SK group look for alternative energy sources. 

As a result, due to the high growth of artificial intelligence, the semiconductor industry is facing great pressure. However, despite the shortage, industry leaders emphasize that resolving the supply constraints might consume time.