The dominant forces in the computer memory industry are embarking on significant factory expansions. However, the anticipated benefits, particularly for standard PC memory prices, are not expected to materialize until at least 2028, and even then, may not fully stabilize the escalating costs. This outlook is largely attributed to the burgeoning demand for memory driven by the artificial intelligence boom, which prioritizes advanced high-bandwidth memory (HBM) production.
A recent analysis by IEEE Spectrum highlights the current state and future trajectory of the memory market. Micron is positioned to be the first to bring new production capabilities online, with a Singapore-based facility slated for 2027 and a Taiwanese factory being repurposed for late next year. Crucially, these facilities will primarily focus on HBM, essential for AI graphics processing units (GPUs) like those from Nvidia. Micron also has plans for a new DRAM plant in New York State, but its full operational capacity isn't expected until 2030, signaling a prolonged period of potential scarcity for conventional DRAM.
Similarly, SK Hynix is developing new HBM manufacturing sites in Cheongju, China, and Indiana, with completion projected for late 2028. Samsung is also contributing to this HBM-centric expansion with a new facility in Pyeongtaek, South Korea, expected to be operational by 2028. Notably, specific plans for new standard DRAM factories from SK Hynix or Samsung have not been explicitly detailed, suggesting a continued emphasis on HBM production.
One might argue that an increase in overall memory production capacity, regardless of the memory type, should inherently benefit the entire market by alleviating pressure on existing production lines. This could theoretically prevent current DRAM facilities from being converted to HBM production, thereby safeguarding PC memory supply. However, economists remain cautious about immediate price corrections. Mina Kim, an economist with Mkecon Insights, notes that "prices come down much more slowly and reluctantly than they go up," and she sees no reason for DRAM to be an exception, especially given the "insatiable demand for compute" from the AI sector.
The underlying factor driving this market dynamic is the unprecedented growth of artificial intelligence. Consultants McKinsey forecast a monumental $7 trillion investment in new data centers by 2030, with a staggering $5.2 trillion dedicated to AI-specific infrastructure. This massive capital allocation underscores the immense demand for specialized memory solutions. Micron projects that the HBM market, once a niche segment, will surge to an annual value of $100 billion by 2028, mirroring the entire DRAM market's estimated value for 2024. This trend aligns with recent observations regarding the aggressive investments by major AI players like Meta, OpenAI, Nvidia, Amazon, and Microsoft, indicating a substantial acceleration in AI-related spending.
Therefore, the current challenges in the memory market are poised to intensify before any significant improvement is seen. This complex situation, deeply intertwined with the rapid expansion of artificial intelligence, is anticipated to require several years to stabilize and rebalance. Consumers should brace for continued high memory prices in the foreseeable future.