SK Hynix shares rose 10.4% to 1.4 million won (US$970) in morning trading on May 4 in Seoul, making it the second-largest company on the KOSPI by market value after Samsung Electronics.
The rally followed gains in US chip stocks and improved sentiment after an analyst raised the company’s target price to 2.3 million won (US$1,600).
The broader semiconductor sector also strengthened, with the Philadelphia Semiconductor Index rising 2.26% on April 30 and 0.87% on May 1. Other SK Group affiliates joined the rally, with SK Square gaining more than 13% and SK rising 8.94%.
Analysts attribute the bullish outlook to a structural shift in the memory market. Chipmakers are reallocating capacity from conventional DRAM—widely used in PCs and servers—toward higher-margin High Bandwidth Memory (HBM), which is critical for AI chips.
Key Highlights
SK Hynix stock surges 10.4% amid AI memory demand Shift to HBM may tighten DRAM supply and raise prices Long-term deals with hyperscalers reshape chip market
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This transition is already delivering strong profitability, with one major memory producer reporting operating margins as high as 72%.
However, the shift is tightening the supply of traditional memory, potentially driving up prices for consumer electronics such as smartphones and PCs. The supply-demand imbalance may persist, as new chip fabrication plants and advanced packaging facilities take years to build, with major capacity additions not expected until 2027 or 2028.
To manage demand, suppliers like SK Hynix and Samsung are increasingly signing long-term agreements (LTAs) with hyperscalers such as Microsoft and Google. These multi-year contracts provide revenue visibility and stabilize supply, but may limit flexibility and lock in prices.
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While large cloud providers benefit from secured supply, smaller enterprise and consumer buyers could face tighter availability and higher costs as more production is committed to long-term deals.