Seoul [South Korea], October 15 (ANI): South Korean semiconductor makers could use expanding memory chip production capacity to regain market share from Chinese rivals, as a shortage of conventional memory has created opportunities for Chinese manufacturers, according to a report by The Korea Herald.
Kim Hyung-joon, head of the Next Generation Intelligence Semiconductor Foundation, said South Korean companies such as Samsung Electronics and SK hynix could strengthen their position in conventional DRAM by increasing production capacity while continuing to cater to the growing demand for high-margin memory used in artificial intelligence (AI) applications.
According to The Korea Herald, Kim argued that China's growing presence in conventional DRAM was partly due to supply shortages in lower-priced memory chips, as South Korean manufacturers increasingly prioritised products used in AI systems.
With additional capacity, Korean chipmakers could serve both the AI market and price-sensitive segments, potentially challenging Chinese manufacturers such as ChangXin Memory Technologies (CXMT).
"The conventional memory cycle has fundamentally changed," Kim told The Korea Herald in an interview.
He estimated that the current memory shortage stood at 30-40 per cent, significantly higher than the supply imbalances of around 2 per cent that historically triggered sharp price movements.
The semiconductor industry is investing heavily in new manufacturing facilities to meet rising demand for memory chips, driven in part by AI infrastructure expansion.
However, the planned capacity additions have also raised concerns that supply could eventually exceed demand, putting pressure on chip prices.
Kim said the new factories could substantially increase production, but manufacturers had more flexibility than in previous cycles to adjust construction schedules and production ramp-ups depending on market conditions.
"The planned fabs could lift output severalfold," he said. "If AI demand fails to keep pace, the market will face oversupply and falling prices."
According to The Korea Herald, Kim estimated Samsung's monthly DRAM wafer capacity at around 720,000 wafers, compared with 550,000 for SK hynix and 300,000-400,000 for US-based Micron Technology.
Together, the three companies currently process an estimated 1.57 million to 1.67 million DRAM wafers per month.
SK hynix plans to build four fabrication plants at its Yongin semiconductor cluster south of Seoul. Kim estimated that the first plant could eventually process around 350,000 wafers monthly, equivalent to more than 60 per cent of the company's current capacity.
Samsung is planning six fabrication plants at a separate Yongin complex. Together, the two projects would comprise 10 planned facilities, although their individual capacities and product mixes have not been disclosed.
Samsung is also expanding its Pyeongtaek campus, while Micron is investing in new facilities in Idaho and New York.
The expansion comes as semiconductor companies attempt to balance demand for advanced memory used in AI systems with the market for conventional DRAM, which serves a broad range of electronic devices.
South Korean manufacturers have increasingly focused on higher-margin products, creating an opportunity for Chinese suppliers to expand in conventional memory. (ANI)