AI infrastructure investment is expected to surge next year by 60% to $1.3 trillion dollars, further compounding the ongoing memory shortage.
Analysts at KB Securities projected hyperscaler spending will grow from 14% in 2025, to 40% this year, and 57% in 2027. The South Korean financial giant warned this is already resulting in an unprecedented supply shortage phase for the memory semiconductor market, with memory giants Samsung Electronics and SK Hynix having “less than 10 days” of inventory.
KB Securities added the shift toward high-bandwidth memory 4 (HBM4) production – galvanized by Nvidia’s upcoming Vera Rubin release – is worsening the memory chip supply squeeze by taking capacity away from conventional dynamic random access memory (DRAM). As a result, KB expects demand growth for DRAM and NAND to outpace supply growth by more than 10-percentage points next year.
Some vendors are already eyeing an opportunity in the space, with Huawei reportedly looking to build a 12-inch chip wafer plant in Shenzhen, China. On the American side, AMD recently acquired MEXT, whose USP is a software-only solution that enables flash storage to appear to the operating system as DRAM.
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Samsung and Hynix stock health
KB’s analysis tallies with recent research from TrendForce, which posited a 98% year-on-year increase in AI infra capex this year, and another 50% in 2027.
Despite the doom and gloom, KB Securities claimed recent stock price declines seen by both Samsung and Hynix were excessive.
“Samsung Electronics and SK Hynix are expected to consecutively set record-high performances for the next three years, and large-scale shareholder return policies are also anticipated to continue,” Kim Dong-won, head of KB Securities’ Research Division, explained. “Given the extreme undervaluation, a strong revaluation is set to begin, and we maintain both companies as top picks in the semiconductor sector.”
The two firms may face a hurdle though, with reports suggesting the South Korean leg of OpenAI’s Stargate data center project has slowed to a crawl.
Per Korea JoongAng Daily, the trio has yet to decide on sites, power supply, or funding structure. The venture was first announced almost a year ago, with Samsung Electronics and SK Hynix contracted to supply memory chips and sister companies Samsung SDS and SK Telecom tapped to build a data center each for the American AI leader.
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