Split Outlook for Memory Cycle: Boom to Last Until 2027, Red Sea May Arrive in 2029

      In October 2026, South Korea’s finance minister Lee Hyoung-il stated at the IMF annual meeting that the semiconductor upswing will last at least until 2027, backed by persistent supply-demand imbalance. The recent stock sell-off was triggered by rate-hike worries and breakthroughs from domestic memory makers. While chip stocks swung sharply, Korea’s economic fundamentals remained solid, with tax revenue lifted by strong chip exports.

      The market slump was sparked by Changxin Memory’s technical progress on 4F² DRAM architecture, with new products set to launch by late 2026. Coupled with doubts over AI spending, Samsung and SK Hynix suffered steep share price drops, triggering circuit breakers on the Korean index and heavy foreign capital outflows.

      Near-term demand stays robust. SK Hynix posted record quarterly profit, forecasting tight supply through 2030. TrendForce projects HBM prices will surge further in 2027, pushing the global memory market above $1.28 trillion. Major vendors are aggressively expanding capacity; new fabs from Samsung and SK Hynix will come online between 2027 and 2028.

      Yet the profit window is limited. A column in Maeil Business Newspaper warned that 2028 remains a safe period, but mass new capacity will flood the market starting in 2029, turning memory into a red sea. The super cycle is likely to end by 2030.

      Long-term risks include slowing AI investment, high US Treasury yields, Micron’s capacity expansion in the US, and narrowing the technology gap between Chinese DRAM firms and Korean players to only 1–2 years. Elon Musk also commented that domestic RAM output will surge in 2028.

      The two forecasts are not contradictory: fab construction takes 2–3 years. Tight supply in 2027 and oversupply in 2029 can coexist. Current aggressive capacity expansion is a race to recoup investment before the downturn.

      Both sides agree on key facts: short-term supply shortage is solid, Chinese competition is a lasting threat, and Korea’s economy is highly vulnerable to memory cycle swings.

      The next turning point will be revealed in Samsung and SK Hynix’s Q3 earnings. Investors will track HBM order visibility, capital expenditure plans and long-term supply contracts. Meanwhile, risks of AI infrastructure write-downs and US inflation data will shape the length of the memory boom.

Reference: Public industry reports. This is our independent market analysis, not a reprint.