SK Hynix Reinvents Its Story: Record Capex and a NAND Surge Turn a Memory Maker Into an AI Infrastructure Play

SK Hynix re-rates as broad AI supplier as NAND profit surges, capex hits record, and margin reaches 71.5%. Analyst targets raised to 3.2M Won.

The narrative around SK Hynix is shifting faster than its stock price. Once seen as a pure-play HBM beneficiary riding the coattails of Nvidia, the South Korean chipmaker is now being recast as a broad-based AI infrastructure supplier. And the market is betting that a massive NAND re-pricing combined with a record investment push will turn that thesis into reality.

Mirae Asset Securities led the charge on Monday, lifting its price target from 2.7 million Won to 3.2 million Won — the most aggressive call among major brokers. The rationale goes beyond high-bandwidth memory. The bank now expects the NAND division to generate roughly 61.1 trillion Won in operating profit, well above its prior estimate, and forecasts a 45% sequential jump in average selling prices for the current quarter. That kind of pricing power, if sustained, rewrites the margin calculus for a business long considered a commoditized cash incinerator.

The numbers from the first quarter already hint at a fundamental change. Operating margin hit 71.5%, a level unheard of for a cyclical memory player. Revenue climbed to 52.6 trillion Won, a 198% surge year-over-year. Those figures underpin the structural rerating: SK Hynix is increasingly behaving like a specialized foundry or an equipment supplier, not a chip shop at the mercy of inventory swings.

Demand drivers remain acutely supply-constrained. Enterprise SSDs with high capacity are in chronic shortage as AI data centers hoard fast storage, a bottleneck that analysts at Mirae see persisting into 2027. Meanwhile, South Korea’s DRAM export price index in April stood 232.8% higher than a year earlier on a won basis, a stark signal that tightness is embedding itself across the memory stack. Nomura has gone as far as to argue that SK Hynix should no longer be classified as a raw-material cyclist but rather as a specialized AI infrastructure provider — a label that carries a higher valuation multiple.

To close the supply-demand gap, management is spending heavily. In the first quarter of 2026, capital expenditure reached 7.35 trillion Won, up nearly 22% from the same period last year. The bulk of that cash is flowing into the new semiconductor cluster in Yongin, where construction has been accelerated. The company is also laying out a clear technology road map: current HBM4 chips use 1b DRAM, but samples of the more powerful HBM4E variant are slated for the second half of 2026, with mass production starting in 2027. That next generation will rely on a finer 1c-nanometer process to meet specific customer performance demands.

All this has been reflected in a blistering stock run. On Monday, shares closed at 1,819,000 Won, with a month-to-date gain of 64.18% and a year-to-date advance of 173.56%. That puts the stock just about 6% below its all-time high set in mid-May. But the pace has stretched the technical fabric: the relative strength index sits at 68.9, and annualized monthly volatility has blown past 75%. The rally is no longer cheap, and any earnings disappointment could sting badly.

The spillover effect is already visible in SK Square, the holding company that owns a substantial stake in the chipmaker. Heungkuk Securities raised its price target for SK Square from 350,000 Won to 1.3 million Won, explicitly citing the Hynix cycle as the primary catalyst. An interim dividend of 1,550 Won per share is also on the table. For now, the market is betting that a NAND margin surge and a record capex program can jointly sustain the momentum. The next real test will come when the current quarter’s pricing data lands — if the 45% ASP increase materializes, the structural rerating gains far more than just analyst support.