Tesla CEO Elon Musk has warned that China will produce "a lot of RAM" in 2028, adding fresh supply concerns to existing market dynamics. According to reports from Maeil Business Newspaper, a leading South Korean financial daily, the timing of Musk's comments highlights the vulnerability of Korea's memory chip-dependent economy. The warning comes as Korean chipmakers are posting record profits despite the supply concerns, with the country's heavy reliance on Samsung Electronics and SK Hynix leaving it exposed once the current boom fades. Musk shared the column's summary on X with a one-line reply, though he did not specify which Chinese companies would drive the increased output capacity.
Gartner data shows memory revenue of $837 billion in 2026, representing 54% of global semiconductor sales, a dramatic increase from just 27% in 2025. The research firm expects memory revenue to cross $1 trillion in 2027, though it still anticipates tight supply conditions in 2027 even as additional capacity enters the market. JPMorgan analysts projected the memory supply shortfall would reach approximately 20% in 2026, 19% in 2027, and 15% even in 2028, driven by surging demand for high-bandwidth memory from AI infrastructure. However, the Bank of Korea has already called the AI chip trade a financial stability problem, adding to concerns about the sector's concentration risk.
Chinese rival ChangXin Memory Technologies (CXMT) recently unveiled progress on a denser DRAM design, with the company already holding about 8% of global DRAM revenue in the first quarter, according to Counterpoint Research. The news has already dragged on Samsung and SK Hynix shares, which together make up about half of the KOSPI index. Musk has also praised Micron's pricing restraint, signaling he is watching memory costs closely across the industry. Memory prices have climbed sharply as AI data centers drive demand for advanced memory chips, with DRAM, NAND flash and HBM prices surging 80%-90% in the first quarter of 2026 compared with the previous quarter.
The column in Maeil Business Newspaper argues that Korea has only two to three years to build new growth industries to reduce its heavy reliance on memory chips. The economy's concentration risk is evident as memory chip oversupply could hit around 2029 when new production capacity starts running, according to the analysis. If Chinese output scales up in 2028 as Musk suggests, memory chip oversupply could start a year earlier than expected, potentially making Korea's diversification window even shorter. This vulnerability stems from the country's heavy dependence on Samsung Electronics and SK Hynix, which have benefited from the current memory boom but face increased competitive pressure from both Chinese rivals and potential oversupply scenarios.
