One of the first sources to relay the concern that the memory chip shortage would not be over quickly was Tom's Hardware in October 2025, linked here on the blog on January 3:
"AI data centers are swallowing the world's memory and storage supply, setting the stage for a pricing apocalypse that could last a decade"
Now we return to Tom's to see what the head honcho at #2 memory chip maker SK Hynix has to say, March 18:
SK Group chairman says memory chip shortage will last until 2030 — wafer supply trails demand by 20%
SK Hynix's CEO is expected to announce price stabilization measures soon.
SK Group chairman Chey Tae-won told reporters at Nvidia's GTC conference in San Jose on Monday that the global memory chip shortage is likely to persist for another four to five years, with industry-wide wafer supply lagging demand by more than 20%, Bloomberg reported. Chey, whose conglomerate controls SK Hynix, said leading memory makers are expanding capacity but are unlikely to fully meet demand until around 2030 because securing additional wafers takes at least four to five years, according to The Korea Times.
SK Hynix holds roughly 57% of the global HBM market and 32% of overall DRAM, and the company is currently building a $13 billion HBM packaging and testing facility at its Cheongju complex in South Korea, with construction scheduled to begin next month and completion targeted for the end of 2027.
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And it's not just silicon wafers for memory chips.
From SemiAnalysis, March 12:
The Great AI Silicon Shortage
TSMC N3 Wafer Shortages, Memory Constraints, Datacenter Bottlenecks, Supply Chain Wars Winner
Token demand is skyrocketing and the need for AI compute continues to accelerate. The improvement in model capabilities combined with the rapid emergence of agentic workflows has driven a surge in user adoption and aggregate token demand. Anthropic added a staggering $6B of ARR in the single month of February alone driven by broad adoption of agentic coding platform Claude Code, and if Anthropic had more compute they would have added more. Despite a huge AI infrastructure buildout over the past few years, available compute is scarce. On-demand GPU prices continue to go up even for Hoppers which are almost 2 generations old.
From our own experiences, we have reached out to every neocloud we know asking if they have small clusters available, but everything is already firmly locked up. This tight supply environment explains the sharp reset in hyperscaler capex plans. Consensus estimates have moved materially higher across the board, with Google standing out as the most extreme example, where 2026 capex expectations have roughly doubled versus prior expectations, primarily driven by datacenter and server spend.
Source: Company Earnings, Bloomberg
This is a tremendous level of spending, and hyperscalers would deploy even more capital if they could, but they are constrained by one critical factor: silicon supply. There is simply not enough advanced logic and memory fabrication capacity to support the pace of compute deployments. While the AD (After Da launch of ChatGPT) era has been riddled with various constraints such as CoWoS packaging and datacenter power, we are now firmly in the silicon shortage phase.
Source: SemiAnalysis Accelerator Model
The TSMC N3 Shortage
One of, if not the, biggest constraints is TSMC’s N3 logic wafer capacity. TSMC’s N3 family started shipping for revenue in 2023, with demand initially driven primarily by smartphones and PCs. N3 got off to a shaky start, with the first variant “N3B” having yield issues and being too expensive relative to the density improvement. Greater adoption came with the refined N3E process, a relaxed variant with far fewer EUV layers and therefore lower cost. Key smartphone and PC customers include Apple, which uses N3 variants for its M3 to M5 Mac chips and A17 to A19 iPhone processors, Qualcomm for its Snapdragon 8 Elite series, MediaTek for its Dimensity smartphone SoCs as well as select automotive and PC chips, and Intel for its Lunar Lake and Arrow Lake client processors.
Source: SemiAnalysis Foundry Model
Up until today, N3 demand has been driven primarily by consumer electronics. In 2026, all the main AI accelerator families are transitioning to N3, and AI will account for the majority of N3 demand before transitioning to N2 and beyond.
We can see in the table below the industry-wide convergence toward TSMC’s N3 family as the leading process node for AI accelerators heading into 2026. NVIDIA transitions from 4NP with Blackwell to 3NP with Rubin. AMD, typically the earlier adopter of new nodes, has already adopted N3 for MI350X and will stay on N3 for the AID and MID tiles for MI400 (XCD is N2). Google’s TPU roadmap shifts fully to N3E starting with TPU v7, with TPU seeing a huge upsize in program volumes this year. AWS also transitions to N3P with Trainium3. Meta’s MTIA follows a similar path, though it will be at much lower volumes.
Source: SemiAnalysis Accelerator Model
This shift is not limited to XPU silicon. The Vera CPU used in VR racks uses N3P for all its silicon. There is also networking silicon in the form of the NVLink 6 switch, as well as scale out switches like Tomahawk 6 and Spectrum 6. With Rubin offering 1.6T of scale out network per GPU, Rubin kicks off the adoption of 3nm 200G optical DSPs.
This sudden convergence of N3 adoption coupled with the continued growth of AI compute demand has resulted in a huge demand shock for N3 wafer capacity. TSMC has been caught flat-footed, with wafer capacity expansion failing to keep pace with surging AI demand. How did this happen? Although the greatest compute buildout in history began in late 2022, TSMC’s capex only exceeded its previous peak in 2025. This year, TSMC is going to smash through last year’s record Capex, because they have realized how far customer demand is exceeding their capacity....
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It's a pretty big deal. If interested see:
Memory: "The inflation spark that could become a deflation shock?"
From M&G's Bond Vigilantes, February 27:
Memory chips have quietly become the most important commodities in the global economy.
"....Micron, SanDisk & Memory Stocks Are Crashing Today"
Thanks for the Memories: "South Korea’s Kospi plunges 12% amid broader declines in Asia markets as Iran conflict rages"
The index, which has been driven by the memory chip makers, Samsung Electronics Co. and SK Hynix Inc. et al., up over 145% from March 2025 to the February 25, 2026 peak is now down 10% on the day, March 4th....
