SK Group Chairman Chey Tae-won said the global semiconductor industry has entered a new era driven by artificial intelligence (AI), arguing that the traditional boom-and-bust cycle that once defined the memory market has been fundamentally transformed by structural changes in demand.
Speaking to Korean reporters after ringing the opening bell for SK hynix's American Depositary Receipt (ADR) listing at the Nasdaq MarketSite in New York on July 10 (local time), Chey said AI has permanently altered the industry's supply-demand dynamics.
"I believe a clear structural change has already taken place," Chey said. "The semiconductor market no longer moves in the same pattern of recurring oversupply and shortages that characterized the past."
While emphasizing that market cycles have not disappeared entirely, he noted that today's supply-demand imbalance differs significantly from previous cycles.
"The cycle itself has not vanished," he said. "However, the gap between demand and supply is now extraordinarily large." According to Chey, one of the defining characteristics of the AI era is that semiconductor demand is expanding much faster than the industry's ability to increase production.
"Demand is growing at a pace far beyond how quickly we can build new manufacturing capacity," he said. "Constructing advanced semiconductor fabs and bringing wafer production online requires enormous lead time. There are also significant infrastructure bottlenecks, making it impossible to expand production wherever and whenever companies want."
He added that these physical constraints distinguish today's market from previous upcycles, when additional supply could eventually catch up with demand.
Chey also expressed confidence that AI will continue to drive sustained growth in memory demand for years to come, particularly as the technology advances toward Artificial General Intelligence (AGI).
"The AI era has completely changed the paradigm of the memory industry," he said. "As AI technology becomes increasingly sophisticated, demand for memory will continue to move upward over a considerable period."
Describing current AI development as still being in its infancy, Chey compared today's systems to "a four- or five-year-old child."
"When that child eventually reaches adulthood, it means we will have entered the AGI era," he said. "Getting there will require unimaginable amounts of data for training and running AI applications."
Using the analogy of human development, Chey argued that AI systems will require exponentially greater memory capacity as they evolve.
"Just as a child accumulates more memories and knowledge while growing up, AI will need to process and store vastly larger volumes of information as it becomes more advanced," he said. "That means demand for memory will continue to increase in a structural way."
Chey also predicted that rapid technological innovation would accompany that demand growth. He said next-generation memory technologies, including HBM4, as well as advances in data compression and storage architectures, will continue to emerge alongside AI development.
"Whatever new technologies come along, I don't see anything capable of stopping the long-term growth of memory demand," he said.
Industry analysts said Chey's remarks reflect growing confidence that AI infrastructure investment is creating a structural growth market for advanced memory rather than another short-lived semiconductor cycle.
SK hynix has become one of the world's leading suppliers of high-bandwidth memory (HBM), a critical component used in AI accelerators and data centers. The company has strengthened its position through supplies to major AI chipmakers, including Nvidia, benefiting from surging demand for AI computing infrastructure.
Chey's comments came on the same day SK hynix celebrated the successful debut of its ADRs on the Nasdaq. The company's shares closed more than 13% above their offering price on the first day of trading, a performance widely viewed as a sign that U.S. investors are assigning a premium valuation to the company's AI-driven growth prospects.
