SK Hynix to double wafer capacity by 2031 as AI memory demand surges

SK Hynix plans to double wafer capacity over five years, betting the AI-driven memory boom will outlast the industry's traditional boom-bust cycles.

SK Hynix aims to double its wafer capacity over the next five years, the clearest signal yet that memory chip makers expect the AI infrastructure buildout to sustain demand well beyond the industry's historical boom-bust pattern.

"Wafer supply will remain tight through 2030, and we cannot rely solely on TSMC to meet our needs," Chey Tae-won, chairman of SK Group, said Tuesday at the Computex conference in Taipei.

The expansion targets the company's high-bandwidth memory (HBM) business, where SK Hynix holds a 58% share of the global market in the first quarter, according to Counterpoint Research. Samsung Electronics and Micron Technology each held 21%. Last week, SK Hynix's market capitalization topped $1 trillion for the first time, joining its two rivals on an AI-driven rally that has lifted the entire memory sector.

Goldman Sachs raised its 2028 operating profit forecast for SK Hynix by 24% to 454 trillion won ($299.62 billion), and for Samsung Electronics by 23.3% to 610 trillion won, citing sustained AI-driven demand. Chey said he wants SK Hynix to be a major HBM supplier for Nvidia's next-generation Vera Rubin system, a win that would lock in revenue visibility through the end of the decade.

Why Taiwan's manufacturing ecosystem matters

Wafer capacity is the upstream bottleneck of semiconductor production — without enough processed silicon wafers, even the most advanced chip designs cannot ship in volume. Chey warned in March that a global wafer shortage could persist until 2030, and his Computex remarks made clear that SK Hynix cannot depend on Taiwan Semiconductor Manufacturing Co. alone. The company needs deeper partnerships across Taiwan's broader manufacturing network, including materials suppliers, packaging specialists, and testing houses, to secure guaranteed production slots.

Taiwan's role extends beyond TSMC's foundry dominance. Advanced packaging techniques such as CoWoS (chip-on-wafer-on-substrate), which stack logic and memory dies together, are critical for HBM production. Any disruption in Taiwan's packaging ecosystem would directly constrain SK Hynix's ability to deliver HBM3E and future HBM4 chips to Nvidia and other AI accelerator customers.

The competitive stakes in HBM

SK Hynix's 58% market share gives it a commanding lead, but the gap is narrower than it appears. Samsung and Micron, each at 21%, have announced aggressive capacity expansion plans of their own. Samsung is building a dedicated HBM fab in Pyeongtaek, South Korea, while Micron is expanding its Hiroshima facility with support from the Japanese government.

The race comes down to who can secure wafer supply and advanced packaging capacity first. SK Hynix's Taiwan partnerships give it an edge in packaging, but Samsung's vertical integration — it manufactures both memory chips and logic chips through Samsung Foundry — provides a different kind of supply chain control. Micron, the smallest of the three, faces the steepest challenge in matching its rivals' capital spending.

For investors, the wafer capacity expansion frames the HBM competitive landscape more clearly. SK Hynix shares have rallied alongside the broader semiconductor equipment complex — Applied Materials is up 75% year to date, Lam Research has gained 86%, and ASML has risen 51% — as the market prices in a multiyear capital spending cycle. If wafer supply remains tight through 2030, the suppliers that can deliver on schedule will command pricing power, while those that fall behind risk losing share in the fastest-growing segment of the memory market.

This article is for informational purposes only and does not constitute investment advice.