The chairman of SK Group in South Korea, Chey Tae-won, expressed his belief that the worldwide shortage of chip wafers is expected to endure until the year 2030.
This prolonged scarcity is attributed to the increasing demand spurred by advancements in artificial intelligence, which consistently exceeds the available supply.
Chey discussed the possibility of SK Hynix considering a US ADR listing to expand its international investor pool during an interview at Nvidia’s GTC Conference in San Jose, California.
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"AI actually wants to have a lot of HBM, and once you make the HBM...we have to use a lot of wafers," says Chey, explaining the shortage of wafers.
"So we need some time to build up more wafers, at least four to five years. The current shortage could continue until 2030, so we expect more than a 20 percent shortage of the wafers," Chey says.
Additionally, it was mentioned that the CEO may reveal strategies to stabilize DRAM chip prices and the company is looking into renewable energy options. According to Counterpoint, SK Hynix holds a dominant position in the high-bandwidth memory (HBM) market, supplying to Nvidia and capturing a significant 57 percent share.
Additionally, the company is ranked as the second-largest player in the global DRAM market, maintaining a 32 percent market share. He stated that SK Hynix aims to develop a plan to steady the pricing of DRAM.
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In response to inquiries regarding the expansion of chip manufacturing capacity in the US, where a significant portion of SK Hynix's clientele is situated, Chey emphasized the necessity of possessing sufficient power, water, construction infrastructure, and skilled engineering personnel for establishing overseas facilities.
He emphasized the complexity involved in meeting these requirements on short notice, underscoring the current priority of concentrating production activities in Korea.
Chey mentioned that a potential US ADR listing could assist in broadening SK Hynix's shareholder base beyond Korea. This would result in an increased presence of American and international investors, therefore enhancing the company's global footprint.
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Chey further mentioned that the geopolitical tensions in the Middle East have posed challenges, leading to an increase in energy prices. As a result, the group has been compelled to explore alternative energy sources.
In Seoul, SK Hynix's shares were showing a 2.7 percent increase, outperforming the benchmark KOSPI's rise of 2.4 percent.