Adata Chen Li-Pai: Memory to Be One of the Most Scarce Resources in the Next Decade, Prices Still Seen Rising in 2H26

Renewed Debate Over AI Bubble: ADATA Chairman Li-Pai Chen Says Talk of a Bubble Is Premature

Market skepticism over an AI industry bubble has resurfaced, with mounting warnings of excessive capital pouring into AI and unsustainable sector valuations. Addressing widespread market concerns and diverging views, ADATA Technology Chairman Li-Pai Chen argued that it is far too early to claim an AI bubble has formed, stressing the real tipping point for any bubble lies years into the future. He even remarked, "After 2030, we can start discussing whether the AI bubble will burst in 2040 or 2050."

In his view, global core AI demand has not been overheated at present. Real demand for AI compute infrastructure, memory chips and supporting power facilities far exceeds general market expectations, and the industry's full growth potential remains largely untapped.

Short-Term Superficial Signals Cannot Define AI Sector Health, Compute Demand Extends Beyond Cloud Data Centers

Many market participants argue cloud hyperscalers have ramped up compute capex too aggressively, decoupling capital spending from actual end-user demand. Meta's move to lease out its underutilized compute capacity has been interpreted by many investors as a signal of weaker-than-expected AI demand.

Chen countered that idle capacity at a single firm or short-term swings in compute utilization cannot serve as evidence of broad-based weakening AI demand. Looking ahead, AI applications will penetrate all scenarios, covering diverse business models including B2B enterprise services, B2G government solutions, B2C consumer endpoints and B2B2C cross-industry integration, driving sustained expansion of compute demand.

Beyond massive cloud storage requirements generated by AI data centers, Chen holds an upbeat outlook on the edge computing segment. As robots, autonomous vehicles, smart factories, unmanned retail outlets and smart homes gain widespread adoption, paired with large-scale deployment of ground infrastructure for low-earth orbit (LEO) satellites, the global installed base of intelligent edge devices will reach hundreds of billions. This demand will exist simultaneously across both cloud and edge layers.

Such massive demand cannot be fulfilled within a decade merely through capacity ramp-ups by the three major global memory chipmakers and leading mainland China memory manufacturers. As AI expands from data centers into the physical world, the persistent tightness in memory supply and demand will evolve from periodic cyclical swings into a long-term structural trend.

Memory Expansion Restricted, Price Uptrend to Persist in H2

Chen pushed back against prevailing bearish narratives circling the memory sector point by point. The market broadly believes sustained capacity expansion by Samsung, SK hynix and Micron will ease supply-demand tightness in the second half of the year, while Taiwanese memory module vendors are working down low-cost inventory holdings, marking the end of the industry's high-profit era.

Chen contends such conclusions lack solid foundational logic. He forecasts the two most scarce global resources over the next decade will be power (renewable green power in particular) and memory chips.

From the supply side, the three leading memory manufacturers have adopted prudent, disciplined capex strategies after enduring multiple semiconductor boom-bust cycles; they will only pursue controlled, measured capacity ramp-ups going forward, avoiding the unregulated massive expansion that triggered oversupply in past cycles.

Meanwhile, mainland China memory manufacturers face two major constraints: import restrictions on critical semiconductor manufacturing equipment, and lengthy construction timelines for wafer fabs and cleanroom facilities. Even with consistent investment, near-term newly added capacity will account for only a tiny share of global supply and fail to alter the overall supply landscape.

Given constrained supply expansion paired with steadily rising demand, the current bearish consensus on memory supply-demand dynamics is unfounded. Chen predicts memory prices will keep climbing in the second half of the year. With sufficient inventory available for shipment amid rising product quotes, there is no reason for corporate profit margins to contract; instead, profitability across the sector is expected to keep improving.