SK hynix weighs US fab as Chey warns on chipflation

SK Group Chairman Chey Tae-won warned that current semiconductor prices are “abnormally high” and risk creating “chipflation,” with rising chip costs feeding into consumer electronics prices. Speaking at the Korea Chamber of Commerce and Industry Summer Forum in Jeju on July 15, he said suppliers should increase output even at the cost of lower margins, arguing that AI companies can absorb higher chip costs more easily than PC and smartphone makers.

Chey said sustained price increases could shrink demand and open space for new competitors, hurting South Korea’s semiconductor industry over the long term. Shortages at Samsung, SK hynix, and Micron have already pushed major PC OEMs to secure DRAM supply agreements with Chinese memory producer CXMT.

Supply constraints are unlikely to ease quickly. Chey predicted AI semiconductor demand could surge 60-100% next year, while major suppliers are not expected to add significant production, and he said overall demand may rise by at least 50-60%. He confirmed that SK hynix is evaluating a semiconductor factory in the United States while also scouting global sites based on speed, scale, and feasibility.

SK hynix already has plans for advanced packaging R&D facilities and HBM production lines in West Lafayette, Indiana. Construction began in 2026, and the site is scheduled to be operational by the second half of 2028, though no location or timeline was disclosed for any additional factory.