SK Hynix Internal Analysis Warns DRAM Supply Shortage Through 2028 (Image Credit, SK Hynix)
TL;DR
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The global DRAM supply shortage is expected to last until 2028, based on an internal analysis attributed to SK Hynix.
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Commodity DRAM supply growth is constrained by slow fab expansion and production capacity being prioritized for AI and server memory.
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Rising AI and data-center demand is absorbing a growing share of DRAM output, tightening availability and sustaining supply pressure.
- New fabs and production shifts may ease supply long term but are unlikely to resolve the DRAM supply shortage before 2028.
Recent disclosures attributed to an internal analysis from SK Hynix suggest that the global DRAM market is on the brink of a prolonged period of constrained supply that could extend until 2028. This is not a short-lived pricing anomaly or a typical inventory cycle — it reflects a structural shift in how memory supply, demand, and factory capacity are evolving. Multiple industry sources are now reporting these projections and the broader implications for DRAM markets.
Below we unpack what the analysis says, explain why this situation is unfolding, look at how other suppliers are responding, and discuss what this means for organizations and memory markets moving forward.
What the Internal Analysis Reveals
According to what has circulated on social platforms and in industry reports attributed to SK Hynix’s internal projections:
1. Commodity DRAM Supply Growth Will Be Constrained Through 2028
The analysis projects that standard commodity DRAM — excluding specialized memory types like High Bandwidth Memory (HBM) and SOCAMM — will see limited bit growth through at least 2028. This means that overall production increases in “general” DRAM categories such as DDR5, DDR4, and other common modules are expected to lag demand until then.
2. Inventory Levels Are Sharply Falling
Supplier inventories are reportedly at historically low levels, reducing available buffer stock and intensifying allocation pressures. This depletion suggests that short-term market supply cannot soak up sudden increases in demand without upward price pressure.
3. Server and AI Demand Are Driving Much of the Imbalance
Internal projections indicate that server memory demand is rising rapidly, driven mainly by AI workloads, data center expansion, and related high-performance infrastructure needs — which absorb large amounts of DRAM. Forecasts show the server’s share of total memory demand could grow significantly by 2030.
4. Production Capacity Growth Lags Demand Needs
Even if new fabrication capacity is built in coming years, the long lead times for construction, tooling, and yield optimization mean that meaningful capacity expansion may not fully materialize until the late 2020s. This structural lag underpins the extended window of tight supply.
Why This Can Happen: Supply, Demand, and Strategic Shifts
The SK Hynix analysis does not exist in isolation — industry dynamics across all major memory suppliers are reinforcing these pressures.
Surging AI and Server Memory Needs
AI servers, especially those running large-scale models, consume massive amounts of memory. High Bandwidth Memory (HBM), which accompanies many AI accelerators, requires complex packaging and significantly more wafer input per bit than standard DDR memory. This demand has forced manufacturers to prioritize HBM production over commodity DRAM.
This reallocation of capacity has a ripple effect: the memory wafer input that could have been used to make DDR5 RAM or other commodity DRAM is instead being used to build HBM and related modules. The result is fewer chips available for the broader market — just when demand for general memory remains strong across PCs, servers, and embedded applications.
Suppliers Shift Production Strategies
Companies are responding to these dynamics with strategic shifts:
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Samsung reportedly scaled down some HBM production to increase DDR5 RDIMM output, reallocating wafer capacity because of higher profitability in certain segments — though this does not fully offset the overall tight market.
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Samsung’s reallocation effort, if broadly implemented, would free up some DRAM resources for mainstream modules, but analysts caution that total increases are modest compared to overall demand needs.
However, this alone is unlikely to solve the structural shortage. Even if factories increase DDR5 output by reallocating wafer capacity, overall global demand may still exceed supply until forward capacity expansions complete their long build and qualification cycles.
Long Lead Times for New Fabrication
Building and ramping new semiconductor fabs is not a short-term solution. From groundbreaking to mass production, new facilities typically take several years to become fully operational, and there is a limited ability to rapidly increase advanced DRAM output in the short term.
This means that even with new factory investments expected, the production capacity growth curve lags demand growth — particularly at higher densities and complex process nodes, which exacerbates supply tightness in the near to medium term.
Will More Factories Solve the Problem?
In theory, greater production capacity would ease supply constraints. But in practice:
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New fabs take time: Factory construction, process qualification, and yield stabilization often take multiple years before they contribute material capacity.
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Existing capacity is reallocated: Even when additional capacity is added, much of it is likely to go first to high-growth segments like HBM and enterprise server memory rather than to commodity memory alone.
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AI demand continues to accelerate: Without slowing, AI memory demand will absorb a significant portion of any new capacity, which means commodity DRAM may still face tight supply even as total output rises.
In other words, building more factories helps, but does not fully solve the structural imbalance if demand continues to outpace available capacity expansion in the DRAM space.
What This Means for the Memory Market and Your Strategy
Prices and Allocation
Industry price data and market commentary suggest that DRAM prices — especially for commodity DDR5 and other standard modules — are under upward pressure, with contract prices rising significantly and inventory scarcity driving allocation challenges.
Buyers and Procurement Planning
Companies that rely on DRAM for servers, storage, and high-performance computing should consider longer lead times and tighter procurement windows. Advance planning, flexible sourcing, and strategic inventory positioning can help mitigate risks associated with constrained supply.
Sellers and Secondary Markets
For organizations that buy or sell used DRAM, server memory, or enterprise modules, tight new supply conditions can increase demand for high-quality refurbished or excess inventory. Secondary market transactions may command stronger pricing as OEM and integrator customers seek alternatives to constrained primary supply. In this environment, organizations looking to sell RAM memory assets may find increased interest from buyers navigating limited primary supply.
Conclusion
The SK Hynix internal analysis — widely reported in tech news outlets — suggests that the global memory market is entering an extended period of structural tightness through at least 2028, driven by soaring AI demand, inventory depletion, prioritized capacity for advanced memory types, and slow capacity expansion.
This is not a simple blip or headline story. It reflects deep-seated shifts in how memory capacity is allocated across workloads, with implications for pricing, procurement, and strategy across the IT ecosystem. For organizations managing memory assets, understanding these dynamics now will be critical in navigating the market over the coming years.
If you’d like, BuySellRam.com can help you evaluate strategic procurement options, secondary market pricing trends, and inventory optimization in light of these long-term supply conditions — reach out for a personalized assessment.