The current artificial intelligence–driven boom in memory chips could begin to lose strength by 2028 as Chinese manufacturers rapidly scale up production capacity and global technology firms start tightening capital spending, a senior Samsung Electronics adviser has warned.
A South China publication reported that speaking at a forum organised by the National Academy of Engineering of Korea, Kyung Kye-hyun said South Korea’s semiconductor sector is currently experiencing strong performance, with further improvement possible next year.
However, he cautioned that conditions may weaken in the following years.
“South Korea’s memory chip industry is performing very strongly this year and some forecasts suggest conditions could improve further next year,” adviser Kyung Kye-hyun said at a forum hosted by the National Academy of Engineering of Korea. “But caution is needed for 2027, particularly 2028.”
Kyung, who previously headed Samsung’s semiconductor division from December 2021 to May 2024, pointed to China’s fast-growing chip manufacturing sector as a key competitive threat for South Korean producers.
He noted that Chinese firms already control roughly 20 percent of the NAND flash market, while their DRAM presence is also rising and could surpass 10 percent with backing from ChangXin Memory Technologies (CXMT).
“Chinese companies are planning to increase capacity by 300,000 wafers over the next three years, and I’m concerned this could allow them to capture around 12 to 13 percent market share,” Kyung said on Monday.
Despite the warning, South Korean chip giants such as Samsung Electronics and SK Hynix continue to benefit from strong demand linked to artificial intelligence data centres, where memory chips remain a critical component.
However, industry analysts say Chinese players including Yangtze Memory Technologies and CXMT are rapidly expanding output in NAND and DRAM segments, supported by lower costs and government subsidies.
CXMT, for instance, reported revenue of 50.8 billion yuan ($7.4 billion) in the first quarter, representing a 719 percent increase year-on-year.
The company also projected first-half 2026 revenue between 110 billion yuan and 120 billion yuan, driven by surging DRAM prices.
Beyond supply expansion, Kyung also raised concerns that demand growth could slow if major technology firms reduce investment in data infrastructure.
He said capital spending trends may become unsustainable if returns weaken in the coming years.
“Big tech companies are investing aggressively right now, but capital expenditures are beginning to exceed cash flow,” Kyung said. “By around 2028, if returns on investment weaken, they may have no choice but to scale back spending.”
He further highlighted a possible industry shift away from Nvidia-dominated graphics processing units toward specialised artificial intelligence accelerators, known as XPUs, which would require more customised memory solutions across data centre operations.
Separately, Samsung Electronics is also facing potential industrial action, with its labour union preparing for a general strike involving around 50,000 workers between May 21 and June 7 over performance-based bonus disputes linked to semiconductor earnings.
Analysts warn that if the strike proceeds, it could tighten global memory supply further and push prices higher.
KB Securities estimates that NAND and DRAM supply could be disrupted by around 2 to 3 percent and 3 to 4 percent respectively.
