Editor’s note: This is the first installment in AJP’s Chipflation series, which examines how explosive demand for artificial intelligence and South Korea’s dominance in memory chips are triggering a ripple effect of price hikes across the global tech supply chain — from Silicon Valley data centers to everyday consumer electronics. This installment looks at how Korean memory makers have gained the upper hand in price-setting.
SEOUL, February 24 (AJP) - South Korea’s semiconductor export prices have more than doubled over the past year, data showed, underscoring the reality of “chipflation” as the country’s memory giants levy what industry insiders call a growing “Korea Tax” on Silicon Valley’s AI boom.
According to data released Feb. 13 by the Bank of Korea, export prices for computer, electronic and optical products jumped 34.2 percent on year in January. The surge was overwhelmingly driven by memory chips, with DRAM and flash memory prices soaring 102.7 percent and 115.1 percent, respectively.
Behind the headline numbers lies a structural bottleneck known in the industry as the “wafer penalty.”
As global technology giants rush to secure High Bandwidth Memory (HBM) for AI servers, production capacity for conventional DRAM is being crowded out. Market tracker TrendForce estimates that manufacturing a single HBM4 wafer consumes capacity equivalent to roughly three standard DRAM wafers.
This trade-off has sharply tightened supplies of commodity memory chips, creating a severe supply-demand imbalance across the market.
"Building a new semiconductor line takes at least two to three years, and expanding an existing one requires one to two years," said Lee Jong-hwan, a professor of system semiconductor engineering at Sangmyung University. "Since memory makers are already profiting from high-margin HBM, they are unlikely to rush investments for commodity DRAM even as its supply shrinks and prices rise."
Contract prices double in 90 days
The impact has been swift and dramatic.
Standard 64GB RDIMM server memory contract prices have doubled from about $450 to more than $900 in just three months. With inventories at SK hynix reportedly falling below four weeks, Samsung Electronics has effectively regained near-absolute pricing power as the world’s largest DRAM producer.
Riding this seller’s market, Samsung is said to be negotiating prices for its next-generation HBM4 chips — which entered mass production this month — at around $700 per unit, a roughly 30 percent increase from the previous generation.
The pricing surge is unfolding against the backdrop of an unprecedented AI investment cycle.
The four largest U.S. hyperscalers — Amazon, Google, Meta and Microsoft — are projected to spend a combined $650 billion on capital expenditures in 2026.
Combined with the Bank of Korea’s inflation data and Samsung’s aggressive pricing strategy, the figures suggest that a sizable portion of that investment will flow directly into the margins of Korean memory makers as an unavoidable “Korea Tax” in the AI era.
"With explosive demand, Samsung holds significant pricing power, which will place a heavy financial burden on U.S. Big Tech," said Kim Deok-ki, a professor at Sejong University. "These skyrocketing costs could inevitably delay the buildup of AI infrastructure and eventually be passed down to consumers through higher AI subscription fees."
Fierce stockpiling by AI leaders such as Nvidia, which dominates AI accelerators, has further strained supply chains. Cleanroom capacity at front-tier manufacturers — including Samsung, SK hynix and TSMC — is increasingly allocated to high-margin AI products, leaving fewer resources for commodity chips.
"U.S. Big Tech companies are software-driven and lack their own fabrication plants," Prof. Lee added. "They can design the chips, but for production, they ultimately depend on the limited foundry and cleanroom capacities of companies like TSMC and Samsung."
As inventories thin, shortages are spilling over into components used in smartphones, laptops and household electronics.
Apple is reportedly exploring the use of Chinese-made memory chips in place of Korean LPDDR products to offset rising costs. Even Samsung, despite its in-house memory production, has raised smartphone prices in response to higher component expenses.
Investors have responded accordingly.
Shares of Samsung Electronics and SK hynix have been scaling fresh highs almost daily, underscoring investor confidence that Korean memory makers will remain the primary beneficiaries of the AI-driven supply squeeze.
With wafer capacity increasingly locked into high-margin HBM production and hyperscaler demand showing little sign of cooling, industry analysts say chipflation is likely to persist. In equity markets, the narrative is shifting accordingly — from the long-cited “Korea discount” to what some now describe as a rising “Korean premium” attached to Seoul-listed semiconductor stocks.
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