SK Hynix hits DRAM crunch as AI devours supply
Morgan Stanley has issued a warning that SK Hynix’s DRAM inventory has dwindled to critically low levels, with DDR5 stock now at about two weeks’ supply—effectively a “produce-and-ship” model. The investment bank attributes this sharp drawdown to surging demand for high-bandwidth memory (HBM), a specialized DRAM used in AI servers, which is consuming an increasing share of global wafer capacity.
SK Hynix, which reported a 62 percent jump in third-quarter 2025 operating profit, has sold out its HBM output and fully booked its DRAM and NAND production capacity through 2026. The company plans to begin shipping HBM4 by the end of the year. Its NAND inventory stands at four to five weeks, also tight by historical standards. As the dominant HBM supplier with a 64 percent market share, SK Hynix is prioritizing AI-related memory, reducing the output of other DRAM types, such as LPDDR5X, used in smartphones and laptops.
Morgan Stanley warns this shift could trigger a severe supply shortage in 2026, sustaining upward price pressure on both DRAM and NAND. Xiaomi President Lu Weibing recently cited unexpectedly steep and rising storage costs, reflecting broader industry strain as AI demand reshapes memory allocation.
