Intensified HBM Competition Increases Pressure
Limited Stock Price Upside
Strong Performance Expected in Q1 and Q2
Kiwoom Securities analyzed on the 19th that SK Hynix's market share in the high-bandwidth memory (HBM) market will turn downward this year, which will limit the potential for further stock price increases. SK Hynix is the leading company in the HBM market share.
Park Yoo-ak, a researcher at Kiwoom Securities, stated, "Starting from the second half of this year, we expect intensified competition in the HBM market, a decline in selling prices, and a decrease in SK Hynix's market share."
Researcher Park explained, "Currently, SK Hynix's stock price reflects a significant premium due to the recovery of the memory market and the monopoly of HBM3/3e, but as we move into the second half of the year, these concerns will become more prominent, limiting further stock price growth."
Meanwhile, the first and second quarter earnings are expected to exceed forecasts. Researcher Park projected SK Hynix's first-quarter revenue to increase by 11% year-on-year to 12.6 trillion KRW, and operating profit to rise by 530% to 2.2 trillion KRW.
Second-quarter revenue is also estimated to increase by 27% year-on-year to 15.9 trillion KRW, with operating profit rising by 88% to 4.1 trillion KRW. Researcher Park evaluated, "The price increase rates for DRAM and NAND will surpass market expectations," adding, "There is also a possibility of upward revision in the second-quarter price outlook due to the recent earthquake in Taiwan."
Despite the strong performance, the high market expectations remain a burden. SK Hynix holds the number one market share (52.5%) in the HBM market, which is essential for artificial intelligence (AI) chips. Although it leads the market by exclusively supplying HBM and HBM3 to Nvidia, concerns about intensified competition will grow if the market share turns downward.
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