SK Group Admits Abnormal Chip Prices, Studies Plant in US

What Happened?

On July 19, 2026, during a press conference at the Seoul Industrial Forum, Chey Tae-won, chairman of SK Group (parent of SK hynix, the world's second-largest DRAM memory manufacturer), stated that memory semiconductor prices are at an 'abnormally high' level. According to The Chosun Daily and reported by Tom's Hardware, Chey noted that while AI companies can absorb higher costs through investments, PC and smartphone manufacturers have no choice but to pass the increase on to final prices. To avoid 'chipflation' — inflation driven by rising chip costs — supply must be expanded. Therefore, SK Group is evaluating the construction of a memory chip plant in the United States, possibly in Texas or Arizona, in line with the CHIPS Act, which allocates $52.7 billion to boost domestic manufacturing.

Why Is This Important?

This statement is significant because it comes from one of the world's three major memory manufacturers (Samsung, SK hynix, Micron), which collectively control over 90% of the DRAM and NAND market. High DRAM and NAND memory prices have been a trend since 2023, driven by explosive demand for AI and HBM (High Bandwidth Memory). According to TrendForce data, DRAM contract prices doubled between 2023 and 2025, and NAND prices rose 80%. However, Chey acknowledges that this price level is unsustainable for consumer markets. If supply is not increased, PC and smartphone prices could rise by 10-15% in the next year, according to IDC estimates, affecting millions of consumers. Additionally, the potential construction of a plant in the US reflects the trend of reshoring semiconductor manufacturing, in line with the US CHIPS Act, which has already attracted investments from TSMC, Intel, and Samsung.

Consequences and Context

Chey also warned that high margins could attract new competitors or strengthen smaller manufacturers. Chinese brands like CXMT (ChangXin Memory Technologies) and YMTC (Yangtze Memory Technologies) are already gaining ground. CXMT produces DDR4 and DDR5 DRAM with 18nm nodes and has begun supplying Corsair for its Vengeance kits, while YMTC has placed its SSDs in Lenovo laptops. Even Apple has requested permission from Washington to use Chinese memory chips in some iPhone models, according to industry sources. Additionally, Elon Musk has expressed interest in building his own chip factory (Dojo 2.0) to reduce dependence on the big three. This suggests that Samsung, SK hynix, and Micron could face increased competition in the long term if they do not moderate prices.

On the other hand, current high prices serve as a defense against price-fixing lawsuits, as AI demand justifies the focus on HBM and reduction of conventional DRAM. SK hynix, for example, allocated 70% of its DRAM capacity to HBM3E in 2025, reducing supply of DDR5 and LPDDR5. However, when the boom cycle ends — possibly in 2027 according to Gartner analysts — the entry of new players could intensify competition and erode margins.

What Should Readers Know?

• Memory chip prices are at all-time highs: DRAM contracts have risen 100% since 2023 and NAND 80%, affecting PCs and smartphones.
• SK Group is considering building a plant in the US to increase supply and reduce prices, with an estimated investment of $20 billion.
• 'Chipflation' could be passed on to consumers: a 10-15% increase in PC and smartphone prices is expected in 2027 if production is not expanded.
• New Chinese competitors (CXMT, YMTC) are gaining market share: CXMT already supplies DRAM to Corsair, and YMTC to Lenovo; Apple has requested permission to use Chinese chips.
• Elon Musk plans to build his own chip factory (Dojo 2.0), which could disrupt the memory market in the long term.

'Memory prices are currently at an abnormally high level. To avoid 'chipflation', supply must be expanded.' — Chey Tae-won, Chairman of SK Group.

In summary, Chey's statement reflects a growing tension between memory manufacturers' current profitability and the sustainability of the consumer market. Expanding supply through new plants and the entry of Chinese competitors could ease price pressure, but also threaten the dominance of the big three. Consumers should prepare for possible increases in consumer electronics prices, while tech companies diversify their supply sources to mitigate risks.