SK Hynix Doubles Price Target and Runs 11% Higher as Samsung Labor Deal Unlocks Memory Supercycle

Shinhan Securities more than doubles SK Hynix price target to 3.8M won, citing explosive memory pricing and AI demand from Nvidia earnings, as stock surges 11%.

Shinhan Securities has more than doubled its price target on SK Hynix to 3.8 million won, a nearly 96% upside from Thursday's close, as the memory supercycle accelerates faster than most analysts had anticipated. The call landed the same day the stock surged 11.2% to 1,940,000 won, just 1.8% shy of its 52-week high, propelled by two powerful tailwinds: a tentative labor agreement at rival Samsung Electronics and blockbuster earnings from Nvidia that reaffirmed insatiable AI chip demand.

The immediate trigger for Thursday's rally was Samsung's preliminary deal with its union, which suspended an 18-day strike that had threatened to disrupt DRAM, NAND, and high-bandwidth memory (HBM) production. Union members will vote on the agreement from May 22 to 27. For SK Hynix investors, the deal removed a dark cloud over the entire Korean memory sector at a time when capacity is already stretched to the limit. Samsung's own shares rose 8.5% on the news, but SK Hynix outpaced its larger rival with an 11% gain, reflecting the market's view that a Samsung strike would have been particularly damaging to SK Hynix's AI-driven growth trajectory. Pre-market trading had already hinted at the rally, with SK Hynix climbing 4.3% and Samsung 6.2%.

The second catalyst came from Santa Clara. Nvidia reported record quarterly revenue of $81.6 billion for the period ending April 26, an 85% year-on-year surge, and guided for $91 billion in the current quarter. The numbers confirmed that spending on AI servers and HBM memory remains at full throttle. Nvidia also noted it continues to expect zero data-center computing revenue from China, which the market interpreted as a sign that demand outside China is so robust that the loss of one region barely matters.

Shinhan's price target revision was grounded in an explosive memory pricing outlook. The brokerage expects average selling prices (ASP) for DRAM to jump 273% year-on-year in 2026, and NAND ASP to climb 292%. The supply of AI-optimized memory chips, meanwhile, is expected to remain tight until at least 2027, giving manufacturers extraordinary pricing power. Bernstein added concrete near-term numbers: SK Hynix should generate around $7.5 billion in HBM revenue in the second quarter alone, a 25% sequential increase. That kind of cash flow underpins the bull case.

Samsung is not standing still. The rival has accelerated its HBM4 production timeline for the second half of 2026, and market observers note that while SK Hynix still leads in quarterly HBM sales, export volumes have recently flattened. HBM chip prices are still expected to rise from early 2027, suggesting the next leg of the supercycle may depend on who can deliver the highest-bandwidth products fastest.

The battle for talent is intensifying alongside the product race. Samsung's tentative labor deal includes a special bonus pool equal to 10.5% of agreed business performance, just above SK Hynix's profit-sharing formula of 10%. SK Hynix's record performance bonus for fiscal 2025 reached 2,964% of base salary — a figure Samsung workers used as leverage in their own negotiations. The compensation gap reflects how the AI boom is reshaping pay scales across Korea's chip industry.

Investor appetite for the sector is spilling into structured products. Kiwoom Securities issued a 20 billion won equity-linked note tied to Samsung and SK Hynix shares, offering an annualized pre-tax return of 32.1%. The product carries a "very high risk" rating and potential capital loss, underscoring that the same volatility driving the rally can cut both ways. The broader trend is visible in fund flows: the PLUS Global HBM Semiconductor ETF posted a three-year return of 676.67% as of May 20, with SK Hynix alone contributing 92.9% over the past three months. The three heavyweights — SK Hynix, Samsung and Micron — make up 75–80% of the portfolio.

A new supply constraint is emerging. ABF substrates, a critical packaging material for high-performance chips, are becoming scarce as AI demand overloads the supply chain. Even if memory chips are available, packaging bottlenecks could delay production schedules. Nomura Securities maintains that a price-to-earnings ratio of 20 is appropriate for leading memory makers, matching global foundry valuations, but that assumes the supercycle delivers on its profit promise.

Looking ahead, the market faces two near-term tests. The first is the Samsung union vote: if the deal is rejected, strike risk returns. The second is whether Nvidia's momentum can hold. For now, the bulls control the narrative, but the stock's 58.5% gain over the past 30 days and a relative strength index of 68.9 suggest a breather would be neither surprising nor unhealthy. With a price target that nearly doubles the current share price, the memory supercycle is being priced as if it has years of runway left — and the early signs from earnings, labor talks, and pricing trends all point in the same direction.