Anxious Musk Points to "China in 2028"... A Warning Shot at Samsung and SK Hynix?

[Anchor]

It is Monday, and time for our Friendly Economy segment with reporter Han Jiyeon. Han, I understand Elon Musk has been talking about memory chips?

[Reporter]

After complaining that memory prices are ridiculously high, he has now claimed that China will flood the market with memory chips in 2028.

Musk has repeatedly brought up memory chips over the past few days.

He initially stated that "the problem is memory supply," and subsequently criticized suppliers other than U.S.-based Micron—which he noted offered reasonable prices—for charging outrageously high rates.

Then, on October 15, he posted this "China 2028" comment on X.

Although he did not mention names, industry insiders view this as a warning shot directed at Samsung Electronics and SK Hynix, which dominate the global memory market.

Behind this is a severe memory shortage.

As AI data centers snap up memory chips, DRAM prices hit another record high in September.

Market research firm TrendForce projected that PC DRAM prices will surge by another 13% to 18% in the current quarter alone.

For Musk, whose ventures spanning Tesla, SpaceX, and xAI are all heavily invested in AI and autonomous driving, memory prices translate directly into costs, leaving him deeply anxious.

One industry official interpreted his remarks as "continuously signaling that prices are too high" to prevent further increases.

And Musk is not alone.

Apple's CEO also labeled the memory shortage an "absolute crisis," even leaving open the possibility of using Chinese-made components.

So why 2028 of all years?

That is when factories expanded by Samsung, SK Hynix, and Micron to meet AI demand are scheduled to go into full operation.

There are also forecasts that ChangXin Memory Technologies (CXMT), China's top DRAM manufacturer, could see its production capacity grow to rank third globally by the end of 2028.

He has effectively zeroed in on the exact timing when memory supply is expected to surge.

[Anchor]

Judging by recent reports on Chinese memory semiconductors, it certainly feels quite threatening.

[Reporter]

That is correct. Expert opinions are somewhat divided.

Some argue that a significant technological gap remains, while others warn that China will begin by targeting entry-level products.

First, the reassuring perspective:

KB Securities estimated that the technological gap in DRAM between Samsung Electronics and ChangXin Memory Technologies spans five to seven years.

In particular, High Bandwidth Memory (HBM) used in AI servers is a high-complexity product created by stacking multiple layers of DRAM, meaning that even an increase in Chinese general-purpose DRAM would have a limited impact on the HBM market.

However, the warnings are equally formidable.

ChangXin Memory Technologies accounted for nearly 8% of the global DRAM market last year, and last month it commenced mass production using a new process that increases the number of chips per wafer by over 50%.

The Korea Institute for Industrial Economics and Trade (KIET) noted that if Chinese-made chips are adopted, they will likely start with entry-level memory used in smartphones, laptops, and PCs, adding that it would certainly be a serious situation if Big Tech companies broaden their supplier base.

At the same time, pushback exists even within the United States.

When news broke that Apple was testing Chinese memory, U.S. senators put the brakes on the move, warning it could threaten national security.

Ultimately, whether an oversupply will materialize even with expanded Chinese factories remains uncertain, as it depends on AI demand, actual facility operation rates, and production yields.

[Anchor]

Finally, there is talk that South Korea's national income will soon surpass $40,000. Could you elaborate?

[Reporter]

Roughly 80% of the increase in national income during the first half of this year went to corporations and self-employed businesses.

Whether this will trickle down to paychecks remains to be seen.

GNI per capita—calculated by dividing the total income earned by the entire population—stood at around $37,000 last year, and the Bank of Korea projected a very high likelihood of exceeding $40,000 this year, provided there are no unexpected shocks and the stable foreign exchange trend continues.

However, an analysis by the National Assembly Budget Office (NABO) showed that while the nation's total income in the first half of this year rose by 284 trillion won compared to a year earlier, the share driven by increases in wage-like labor income was limited to just 17%.

This income growth was driven less by a surge in overall semiconductor sales volume and more by a sharp rise in semiconductor prices themselves fueled by the AI boom.

Income earned in this manner is first captured as corporate earnings before trickling down to households through wages, performance bonuses, and dividends.

Looking back a bit further, the same pattern occurred during past semiconductor booms.

Between 2023 and 2024, when corporate income grew by 15%, labor income increased by only around 10%.

Consequently, the Budget Office noted that it is necessary to exercise caution before assuming that an increase in national income will immediately improve everyday household finances.

Nevertheless, expectations were also raised that if large-scale investments and performance incentives in the semiconductor sector continue, the share flowing down to households could expand further.
※ Please note: This article was translated by AI and may contain errors.