Bank of Korea: South Korea's monthly memory chip output is set to grow by ~600K wafers by 2028, widening its lead over China's CXMT, set to grow by ~300K wafers
Context & Ripple Effects
South Korea’s planned expansion follows a recovery from the 2022 inventory overhang: chip output accelerated in 2023 and AI-memory demand drove a 65.3% year-on-year output increase in February 2024. The investment base was already forming in 2023, when SEMI projected a sharp increase in South Korean advanced-equipment spending for 2024.
The Bank of Korea’s 2028 capacity outlook puts that build-out in a longer supply-constrained cycle. In March 2026, SK Group Chair Chey Tae-won said basic wafer supply was lagging demand by more than 20% and that memory capacity might not catch up until around 2030.
First-order effects
- South Korean memory producers are set to add about 600,000 wafers of monthly output capacity by 2028, extending their production-scale lead over CXMT’s projected roughly 300,000-wafer expansion.
- CXMT gains meaningful new capacity, but its planned increase does not close the projected output gap with South Korea.
Second-order effects
- South Korean memory makers gain greater scope to serve incremental demand while capacity remains constrained, reinforcing the manufacturing advantage highlighted by SK Group’s assessment of wafer shortages.
- CXMT faces stronger pressure to translate its own capacity additions into competitive supply, because South Korea’s expansion is projected to be twice as large in absolute monthly wafer terms.
Third-order effects
- If these build-out plans hold, memory production scale becomes more concentrated in established South Korean manufacturing clusters even as China expands domestic supply.
- The divergence points to a capacity-led memory market in which equipment investment and wafer availability, rather than demand alone, determine which producers can capture the AI-driven cycle.
The trend: AI-related memory demand is turning planned fab capacity into a strategic differentiator, with South Korea projected to widen its scale advantage over China’s CXMT.