South Korea's two dominant memory chipmakers are racing to expand capacity as AI data center demand drives projected price increases of 40–50% in Q3 2026.
Samsung and SK Hynix, with backing from the South Korean government, have announced plans to invest a combined $590 billion in chip production capacity, as surging demand from artificial intelligence data centers pushes memory prices sharply higher. [1]
The investment is structured across several projects: 800 trillion won will fund four new factories in South Korea’s southwest, 81 trillion won will go toward a packaging center, and 30 trillion won is earmarked over 15 years for next-generation chip development. [1] The initiative is tied to President Lee Jae Myung’s agenda to stimulate regional economic growth. [1]
The two companies together control close to 80 percent of the global market for high-bandwidth memory (HBM) — the type of memory chip that AI workloads depend on — giving the expansion outsized significance for the broader AI supply chain. [1]
The capacity additions cannot arrive quickly enough for buyers. According to analysis from Jefferies Equity Research, memory prices are projected to rise 40 to 50 percent in the third quarter of 2026, followed by a further 30 to 40 percent increase in the fourth quarter. [1] Analysts expect an additional 40 to 45 percent price increase in 2027, with meaningful supply relief unlikely until 2028, when 15 to 20 percent of new capacity is expected to come online. [1]
The price pressure is already rippling through consumer electronics markets. Apple, for example, has raised prices on Macs and MacBooks as memory costs climb. [1]
Sources
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