SK Hynix, the HBM Leader, Set for Strong Mid- to Long-Term Performance [Click eStock]

SK Hynix Maintains Strong Position Despite Entry of Samsung Electronics and Micron
Surging Demand for General-Purpose DRAM
Limited Supply Drives Up Prices

SK Hynix is expected to see its mid- to long-term performance continue on an upward trajectory. Analysts predict that the company will maintain its position as the leader in the high-bandwidth memory (HBM) market and continue to achieve record-breaking results, even if Samsung Electronics enters the market.

On September 23, KB Securities raised its target price for SK Hynix by 35.2% to 4.6 million won and maintained its "Buy" rating. The previous day's closing price was 3,510,000 won. The decision was based on SK Hynix's sustained dominance in the HBM market and the expectation that surging demand for server DRAM and enterprise SSDs, driven by general server replacement needs, will further boost its performance.

Next year, the HBM market driven by Nvidia is expected to see significant supply chain diversification starting with HBM4. Micron Technology of the United States currently lags behind SK Hynix in both HBM4 speed and production capacity. While there is a possibility that Samsung Electronics will enter the market, SK Hynix is expected to maintain its number one supply share.

For the third quarter of this year, SK Hynix's revenue is projected to reach 23.595 trillion won, with operating profit at 10.976 trillion won. This represents increases of 34.3% and 56.1%, respectively, compared to the same period last year. With quarterly operating profit surpassing 10 trillion won, profit growth is expected to continue into the fourth quarter. By segment, operating profit for DRAM is estimated at 11.01 trillion won, while NAND is expected to post an operating loss of 400 billion won.

Demand in the general server sector has recently exceeded expectations, and demand for general-purpose DRAM from hyperscalers is surging in particular. Since the growth of cloud computing in 2018, investment has shifted toward artificial intelligence (AI) servers from 2023 onward, causing the five-year replacement cycle for general servers to be continuously delayed. Considering this, the increase in general-purpose DRAM demand is likely to continue until the second half of next year.

Kim Dongwon, a researcher at KB Securities, stated, "SK Hynix is facing limited capacity expansion for HBM and general-purpose memory through 2026, while memory demand is diversifying from AI data centers to server DRAM, GDDR7, LPDDR5X, and enterprise SSDs." He added, "With future benefits from rising memory prices and improved supply-demand dynamics, SK Hynix is expected to achieve record-high performance in 2025."