The recession has only deepened a four-year memory chip shortage, the technology industry’s biggest headache. Help is coming into view. Meanwhile, Samsung announced plans to build a $230 billion factory in Pyeongtaek, South Korea, with production expected to begin in 2028. Demand for Dynamic Random Access Memory (DRAM) is at an all time high currently. This wave is being pushed largely by the burgeoning demand from artificial intelligence (AI) data centers. While companies continue to wrestle with the ramifications of this recent demand explosion, the entire industry is left with some staggering considerations in terms of supply and price.
Demands from AI data centers are at the root of this bottomless pit of DRAM demand. They require huge memory capacities to feed graphics processing units (GPUs) and other accelerators. This sudden demand has pulled supply from other industries, causing memory prices to skyrocket to all-time highs. Manufacturers such as Samsung are deeply investing to prepare for the radically changed landscape. They’re rethinking the status quo, pioneering new solutions to increase capacity and improve efficiency.
Samsung’s Expansion Plans
Samsung’s new facility in Pyeongtaek is the clearest expression yet of the company’s commitment to a future of memory production. That means this plant will come online in 2028. If successful, it will bolster Samsung’s position as a foundry fintech leader. The company has previously demonstrated its ability to build a 16-high stack of DRAM dies utilizing such hybrid bonding technology. With this new concept, it predicts that manufacturing stacks of 20 dies should be attainable.
As a result, the demand for high-bandwidth memory (HBM) has skyrocketed. The new HBM4 standard enables up to 16 stacked DRAM dies. This breakthrough enables GPUs and memory to be integrated into a more compact, single-package format. For this reason, it tremendously improves efficiency for AI workloads. As an example, the recently announced B300 model uses eight of those HBM chips, which each consist of a stack of 12 DRAM dies.
“Relief will come from a combination of incremental capacity expansions by existing DRAM leaders, yield improvements in advanced packaging, and a broader diversification of supply chains,” – Shawn DuBravac
Samsung’s continued and rapid manufacturing expansion is vital as it helps meet the increasing demands of data centers around the globe. At least 2,000 new data centers are in the works or being built right now around the globe. This increase will certainly drive sustained long-term growth in demand for DRAM.
The Demand Surge and Its Implications
This extraordinary spike in revenue for companies such as Nvidia highlights how crucial DRAM has become. Nvidia’s data center business revenue has surged from a little more than a billion dollars in late 2019. By October 2025, it exploded to an incredible $51 billion. Beyond this explosive expansion, it’s a demonstration of the undying hunger for more and more computing power—and therefore memory chips.
As the present retrogression of the DRAM market demonstrates, this is driven by a complicated mix of supply-limiting factors and exploding demand. As Nobel Prize-winning economists like Paul Krugman and Joseph Stiglitz have recently warned, prices go up much faster than they go down. This anomaly is even more problematic within the context of DRAM. The endlessly escalating need for computing power may hold off any immediate alleviation from exorbitant prices.
“In general, economists find that prices come down much more slowly and reluctantly than they go up. DRAM today is unlikely to be an exception to this general observation, especially given the insatiable demand for compute,” – Mina Kim
As the building blocks of the technology firms most in demand today, they have difficult choices to make about investing in additional capacity. With new fabrication plants costing more than $15 billion, this is no small commitment. Consequently, firms are risk-averse and under-invest unless assured of long-term demand growth.
Addressing Supply Chain Challenges
The memory chip industry currently faces two primary strategies to tackle supply issues: innovation and building more fabrication facilities. Innovation improves productivity and expands production at every plant. Constructing new fabs represents a significant capital expenditure that most companies are unwilling to invest during unpredictable economic periods.
Though these obstacles are significant, players like Samsung have already made their determination clear by pursuing aggressive plans to expand production capacity. The complex architecture of DRAM stack towers measures approximately 750 micrometers thick. Stacked atop base dies, they shuttle bits between memory dies and processors, representing the cutting edge of semiconductor manufacturing that beneath the hood create these critical components. This technology needs to be tightly integrated in close proximity to GPUs or AI accelerators, adding more complexity to manufacturing processes.
Mina Kim emphasizes the dual approach needed to resolve supply chain struggles: “There are two ways to address supply issues with DRAM: with innovation or with building more fabs.” This dual approach to real, short-term innovation and long-term capacity expansion will be key in helping to stabilize the market.
Looking Ahead
Of those, Samsung is making the biggest investments to scale up its production in 2028. At the same time, the memory chip landscape is changing rapidly because of surging demand. The company’s innovations in HBM technology and the anticipated opening of new facilities signal a proactive approach to mitigating supply shortages.
Though, it is unclear to what extent and how rapidly prices will change in reaction to these recent events. The future demand for even more sophisticated memory technology will certainly continue to put the squeeze on both producers and users to say the least. As industries increasingly rely on AI and data-driven technologies, it is evident that securing sufficient DRAM supply will remain a critical challenge in the coming years.