Musk floats ‘2028 China DRAM’… A big buyer’s ploy to shake prices? - 경향신문

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Tesla CEO Elon Musk speaks at a conference. AP Yonhap News

“The issue is RAM supply.” That was a short reply Tesla CEO Elon Musk left on X (formerly Twitter) on the 11th (local time). Over the next five days, his comments on memory semiconductors escalated. On the 12th, he said, “Once China masters a manufacturing method, its ability to scale is often greater than the rest of the world combined,” citing lithium batteries and solar as examples. On the 13th: “Micron has been reasonable about future memory pricing, but other vendors have been at price-gouging levels,” adding, “Customers will not forget this.” On the 15th, he stated flatly, “China will make a lot of RAM in 2028.” He did not name companies, but many read the remarks as aimed at Samsung Electronics and SK hynix, which lead the global memory market.

As Musk’s remarks continued on the 15th, Samsung Electronics and SK hynix shares tumbled 9.48% and 11.06%, respectively, on the domestic stock market. His post that day was attached to a summary post of a domestic column warning of ‘oversupply in 2029’ and arguing that Korea has only 2-3 years left. Concerns originating in Korea were amplified via Musk and boomeranged back home. The KOSPI fell 14.46% last week, its steepest weekly drop since October 2008. U.S. rate worries and growing skepticism about artificial intelligence (AI) investments both played a role, but many judge that a major customer’s comments exacerbated the jitters.

Behind this offensive lies Tesla’s thirst for memory. On the 1st, Musk said Tesla had cut the RAM capacity of the AI5 chip by half and of the AI6 by one-third. He explained it was the only way to secure production volumes for the Optimus humanoid robot. Tesla is also a customer that signed in July 2025 a $16.5 billion (approximately 22.8 trillion KRW) AI chip foundry contract with Samsung Electronics running through 2033. It is a major Samsung customer in foundry, but in the memory market it stands as a buyer sparring with suppliers over price. Apple CEO John Ternus also called memory supply constraints an “absolute crisis.” In a supplier’s market, ‘big buyers’ appear to be mounting public pressure. Micron, which Musk praised, is the supplier that allocated volume for Tesla. Micron’s most recent quarterly gross margin was 81%, double a year earlier.

Musk’s pinpointing of 2028 also ties into contract structures. Samsung Electronics is said to have filled 75-80% of next year’s memory supply under long-term agreements (LTAs). SK hynix said in its July earnings that it had finalized long-term deals with more than 10 customers. Even so, long-term contracts leave room for price adjustments. It reads as a gambit to seize the upper hand in talks over new volumes and pricing ahead of 2028, when capacity from fab expansions begins to come online.

Whether the ‘Made-in-China card’ will work right away is uncertain. ChangXin Memory (CXMT) held a 7.7% share of the global DRAM market last year. The research firm Sitrini Research forecasts CXMT’s monthly wafer capacity will rise from 350,000 this year to 950,000 by 2030. But the U.S. government sent a warning over Apple’s testing of China-made memory. Musk himself said on the 16th, “If China ramps LP5·LP6 quickly like it has with other products, 2028 will be a different story,” while adding, “HBM (high-bandwidth memory) is a much harder hill to climb.” LP5·LP6 are low-power mobile DRAM (LPDDR5·6) that Tesla uses in its AI5·AI6 chips. This is where concerns arise that Chinese substitution could start with such commodity DRAM, where the technology gap is smaller. Still, Musk effectively acknowledged that China is not yet in a position to catch up in HBM, a segment led by Samsung Electronics and SK hynix.

The outlook diverges. SK hynix President Kwak No-Jung said in a Reuters interview in July that next year will bring the ‘worst in industry history’ supply crunch, and projected customer demand will exceed supply capacity even beyond 2030. Others, however, believe it will be hard to avoid downward price pressure after 2028 as expansion volumes increase. Tightening long-term contract terms and broadening a customer base concentrated in a few Big Tech players are cited as key tasks.

Attention now turns to earnings at the end of the month. SK hynix will hold its third-quarter earnings call on the 28th, and Samsung Electronics on the 29th. What the two companies say about long-term contract pricing terms and supply-demand beyond 2028 will likely be the first test of whether they can calm ‘Musk-induced jitters’. A brokerage official said, “When a buyer brings up price in public, it means negotiations have already begun,” adding, “Chinese-made products may not be an immediate alternative, but it will be hard to insist on today’s prices at the 2028 negotiating table.”