SK hynix to ramp up AI memory chip production, chief says

SK hynix chairman Chey Tae-won announced plans to increase production of AI memory chips amid rising demand from data centers, speaking at a conference in Washington on Feb. 20.

He described high-bandwidth memory (HBM) as a “monster chip” that has contributed to record earnings for SK hynix, whose share price has more than quadrupled over the past year.

The company’s 2026 capital expenditure is expected to rise significantly to meet demand for HBM chips used in AI accelerators from firms like Nvidia.

Analysts project 2026 operating profit could reach between US$70 billion and over US$100 billion.

Chey, however, warned of potential future losses due to competitive and technological shifts, and highlighted infrastructure challenges, including the need for power plants to support AI data centers.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

The company’s “monster chip” bet rests on market share and deep customer ties

Analysts expect SK hynix to keep more than 50% of the total High Bandwidth Memory (HBM) market through 2026 1.
HBM brings strong returns, with estimates putting operating margin near 70% on those products 2.
Order books look full, with the firm already taking commitments for all DRAM and NAND production capacity in 2026 3.
Work with Nvidia continues, plus joint efforts with TSMC (Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker) on next-generation HBM base dies for “custom HBM,” which shifts some functions from other system semiconductors into HBM base dies 4.

The AI memory rush is squeezing supply and changing how contracts get written

HBM takes more steps to build and it consumes more wafer capacity than conventional DRAM, which tightens supply in traditional memory lines 5.
That shift adds pressure on consumer memory used in PCs and graphics cards, with igor’sLAB citing internal documents that suggest tight DRAM supply could last until at least 2028 5.
igor’sLAB says it cannot verify those documents’ authenticity, plus there is no official confirmation from SK hynix 5.
Sellers hold more leverage, with Samsung and SK hynix plus Micron moving from long-term fixed-price deals to shorter contracts with post-settlement pricing, while Apple is cited as moving talks from a six-monthly to quarterly rhythm 6.
Higher component costs may land with buyers, since forecasts put retail PC prices up 20% or more in 2026 largely from rising memory prices 2.