Memory chip inventories at Samsung Electronics (005930.KS) and SK hynix (000660.KS) have fallen to less than 10 days of supply, and a severe shortage could emerge next year, according to a new forecast. Surging investment in artificial intelligence infrastructure is driving memory demand higher so quickly that the two chipmakers may run out of product they can actually sell.
KB Securities said on the 7th that the memory market next year will see "the tightest supply conditions in history," naming Samsung Electronics and SK hynix as its top picks in the semiconductor sector.
"As of the third quarter, memory inventories at Samsung Electronics and SK hynix have fallen to less than 10 days, and this goes beyond a simple demand recovery — there is a high likelihood that the volume available for supply will become absolutely insufficient," said Kim Dong-won, head of research at KB Securities. "As a result, the possibility that sellable memory volumes will be exhausted next year could become a reality."
Behind the shortage forecast is aggressive AI spending by the world's largest cloud companies. KB Securities said their AI infrastructure investment next year is being revised sharply higher to $1.3 trillion, up 60% from a year earlier. Cloud AI services, token-based billing, agentic AI and model hosting have become direct revenue sources, accelerating AI infrastructure spending, the brokerage said.
Memory chips are also expected to account for a rapidly growing share of that spending. KB Securities projects memory's share of AI infrastructure investment will expand to 40% this year and 57% next year, from 14% in 2025 — roughly a fourfold increase in two years. Market researcher TrendForce puts next year's figure even higher, at 68%.
The shortage is not expected to be limited to high-bandwidth memory (HBM). AI server investment is simultaneously lifting demand for server DDR5 and enterprise solid-state drives (eSSD), which could strain supply across memory products including DRAM and NAND.
KB Securities forecast that bit-based demand growth for DRAM and NAND next year will exceed supply growth by more than 10 percentage points. With a structure in place that makes it difficult to expand supply enough to match rising demand, the memory shortage could deepen further, the brokerage said.
Expanded production of HBM4, the next-generation high-bandwidth memory, was cited as another factor constraining conventional DRAM supply. Because HBM4 requires more wafer capacity than conventional DRAM, ramping up HBM4 output reduces the capacity available for standard DRAM.
"HBM4 takes up three times the wafer capacity of conventional DRAM," Kim said. "The more HBM4 production increases, the less capacity can be allocated to conventional DRAM, which could deepen the shortage."
Despite the outlook for the memory market, shares of Samsung Electronics and SK hynix have undergone a steep correction. Both stocks have fallen 38% from their peaks over the past three months, pushing their price-to-earnings ratios based on next year's expected results down to about three times.
"We expect record earnings over the next three years and continued large-scale shareholder return policies," Kim said. "From extreme undervaluation, we expect a strong re-rating to begin."
