SK hynix headquarters in Icheon, Gyeonggi Province. Yonhap News
LS Securities raised its target price for SK hynix (000660.KS) to 2.1 million won from 1.5 million won on Tuesday, citing the chipmaker’s mid- to long-term growth potential backed by its high-bandwidth memory (HBM) competitiveness. The brokerage, however, noted that labor costs and performance bonuses could emerge as new variables amid rising memory prices.
“If competitors pay performance bonuses at levels high relative to operating profit, demands for additional bonuses could also expand within SK hynix,” said Jung Woo-sung, a researcher at LS Securities. “In an environment where memory prices are surging, the labor value of manufacturing and technical personnel is bound to be reassessed.”
Jung added that “how each company will distribute performance rewards and to what extent the related costs will be reflected in earnings could act as a new variable going forward.”
The recent rally in SK hynix shares has been driven by a rebound in global memory prices and concentrated demand for AI memory. In particular, strength in server DRAM prices is leading to upward revisions in earnings estimates, he explained.
“Based on market research firm TrendForce, server DRAM contract prices for April were set stronger than expected, and mobile DRAM prices are also increasingly likely to approach server price levels,” Jung said. “We revised our earnings outlook upward to reflect this.”
He noted, however, that the recent surge in share price goes beyond simple earnings improvement expectations and largely reflects concentrated inflows into the stock as a flagship AI memory play. “Ahead of earnings announcements from major global partners, investment demand related to AI memory is concentrating on SK hynix,” he said.
“SK hynix has relatively low exposure to commodity memory price volatility and holds the highest reliability in terms of HBM mass production,” Jung said. “As market attention shifts beyond 2026 from simple DRAM prices to HBM revenue growth rates and customer market share in 2027, its competitiveness is highly likely to stand out further.”
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