Inventories at Samsung and SK Hynix are down to less than 10 days
South Korea’s KB Securities said in a report released on Sept. 7 that memory inventories at Samsung Electronics and SK Hynix have dropped to less than 10 days, according to Korean media. The report said the memory market could face its tightest supply conditions on record next year as AI infrastructure investment expands at an unprecedented pace, with a risk that sellable supply could effectively run out.
KB Securities says the issue goes beyond a simple demand recovery
Kim Dong-won, head of research at KB Securities, said that by the third quarter of this year, memory inventories at the two Korean chipmakers had already fallen below 10 days. In his view, this is no longer a straightforward rebound in demand. It could turn into a situation where the volume available for sale is itself exhausted.
Kim added that AI servers do not only absorb demand for HBM. They also pull in demand for server-grade DDR5 and enterprise SSDs, or eSSDs, which could lead to a shortage on a historic scale.
AI infrastructure spending forecast raised to $1.3 trillion
The report said the strain on supply is being driven by the demand side. Global hyperscale data center operators’ AI infrastructure spending for next year has been sharply revised up to $1.3 trillion, a 60% increase from the previous year. KB Securities said spending is accelerating because AI business models are starting to take shape, with cloud AI services, token-based billing, agentic AI and model hosting becoming direct sources of revenue.
KB Securities expects memory to account for 14% of AI infrastructure investment in 2025, then 40% this year, and 57% next year. That would mark growth of more than four times in two years. Research firm TrendForce is even more aggressive, saying the ratio could reach 68% next year.
HBM4 capacity use is a central part of the shortage call
KB Securities identified the shift toward HBM4 and the resulting squeeze on conventional DRAM capacity as a key reason behind the expected shortage. The report said HBM4 mass production consumes about three times as much wafer capacity as standard DRAM. With total wafer-line capacity limited, a broad HBM4 ramp would inevitably reduce the capacity available for traditional DRAM and place a serious cap on bit supply growth.
KB Securities estimates that bit demand for DRAM and NAND next year will exceed supply by more than 10 percentage points.
Shares of the two companies have corrected 38% from recent highs
The report also said Samsung Electronics and SK Hynix shares have fallen 38% from their highs over the past three months. KB Securities said the correction was too deep and out of line with fundamentals. The firm expects both companies to post record profit levels for three consecutive years and said large-scale shareholder return programs add to the case that the stocks are trading at severely undervalued levels. KB Securities kept Samsung Electronics and SK Hynix as its top picks in the semiconductor sector.
Market sentiment also showed signs of improvement. In the previous trading session, U.S.-listed memory names moved higher together. SK Hynix ADR (NASDAQ: SKHY) rose 8.14%, while Micron (NASDAQ: MU) and SanDisk (NASDAQ: SNDK) gained 6.10% and 11.90%, respectively.