SK Hynix Flips the Valuation Table on Samsung as It Tests Intel’s Packaging Alternative

SK Hynix overtakes Samsung in forward earnings multiple for first time, driven by a severe memory shortage and 72% operating margin. The company also tests Intel's EMIB packaging for AI chips.

A symbolic shift in South Korea’s semiconductor hierarchy has taken shape. For the first time in its corporate history, SK Hynix now commands a higher forward earnings multiple than Samsung Electronics, the long-dominant rival that once dictated the sector’s pecking order. The projected price-to-earnings ratio for 2026 stands at 6.79 for SK Hynix, just a whisker above Samsung’s 6.77 — a reversal that seemed unthinkable only a few months ago.

The root of that inversion lies not in any single product line but in an epic tightening of the memory market. SK Hynix has effectively sold every chip it can make — DRAM, NAND, and especially high-bandwidth memory — for the foreseeable future. That crushing scarcity has pushed its operating margin to a stunning 72 percent in the first quarter of 2026, a figure that outstrips even Nvidia’s profitability. Goldman Sachs calculates the DRAM supply gap at 4.9 percent, describing it as the worst shortfall in 15 years. Customers such as Microsoft and Google are now exploring direct investments in new fabrication facilities just to lock down future allocations.

Yet even as the P/E milestone makes headlines, SK Hynix is quietly tackling a different bottleneck that could determine whether its current dominance endures. The explosive demand for AI accelerators has strained advanced chip-packaging capacity to breaking point. TSMC’s CoWoS technology, the industry standard for 2.5D packaging, is in such short supply that lead times have stretched dramatically. SK Hynix already works closely with TSMC, but it now appears to be searching for a second path. The company is testing Intel’s EMIB technology, which connects multiple dies using tiny silicon bridges embedded in the substrate rather than the larger interposer used by CoWoS. EMIB is considered cheaper per package and thermally simpler — qualities that matter as HBM stacks grow taller and hotter.

For Intel, the trial represents a critical validation of its foundry ambitions beyond traditional wafer manufacturing. The company has already stated that some client designs have migrated from CoWoS to its own EMIB or Foveros packaging solutions, and large cloud providers are showing interest. If SK Hynix eventually adopts EMIB for production, it would prove that Intel’s packaging strategy can attract tier-one memory partners — a development that could reshape the entire back-end supply chain.

The shares themselves had been on a meteoric run before profit-taking hit on Friday. The stock closed at 1,819,000 South Korean won, down 7.66 percent on the day, after setting an all-time high of 1,976,000 won in mid-May. The relative strength index hovers near 69, indicating the stock remains hot. For the year, the gain still stands at nearly 169 percent, fueled by the relentless narrative of AI-led memory scarcity.

That narrative, however, carries its own risks. Samsung is not conceding the field. The rival’s HBM4 mass production is slated to begin in the second half of 2026, and Samsung’s current yield for HBM4 stands below 60 percent. SK Hynix, by contrast, already achieves around 80 percent in comparable process steps. If Samsung can close that gap, it could claw back market share. Furthermore, labor unrest at Samsung — unprecedented strike risks that JPMorgan estimates could cut operating profit by as much as 12 percent — has given SK Hynix a temporary tailwind that may not last.

SK Hynix is also building its own capacity to meet the insatiable demand. The M15X fabrication facility is scheduled to enter pilot production in May 2026, where it will eventually churn out HBM3E and HBM4 memory. The combination of new fabs and a potential second packaging partner could ease the bottlenecks that currently lock in its revenue growth.

Yet concentration risk is growing. Together, Samsung Electronics and SK Hynix now account for 42.2 percent of the Kospi index. Any slowdown in data-center spending or a geopolitical flare-up would hit the broader South Korean market disproportionately hard. For now, though, SK Hynix is executing on two fronts: squeezing maximum value from the HBM scarcity and hedging its packaging dependency against TSMC. The next clear test — the M15X pilot run in May — will tell whether that strategy holds together.