SK Hynix Rides Memory Supercycle to 405% Profit Surge as Analysts Double Price Targets

SK Hynix posts record 37.6T won profit as DRAM/NAND prices soar; HBM fully booked through 2026, but overcapacity and Samsung competition loom.

The price explosion gripping Korea’s memory chip industry has reached a critical inflection point. Analysts at Shinhan Securities now anticipate that SK Hynix’s average selling prices in DRAM will leap 273 per cent year-on-year in 2026, with NAND flash expected to follow with a staggering 292 per cent jump. That radical pricing outlook has prompted the house to more than double its target on the stock — from 1.9 million won to 3.8 million won — as a supply-starved market hands chipmakers unprecedented leverage.

The earnings reality already mirrors that bold call. SK Hynix posted a record quarterly operating profit of 37.6 trillion won, a 405 per cent surge from the prior year, on revenue of 52.6 trillion won. The operating margin sprinted to 72 per cent, a level that places the South Korean group at the top of the semiconductor league table. Investors responded by bidding the shares up 11.17 per cent on Thursday to 1.94 million won, putting the stock within striking distance of its all-time high. The 14-day relative strength index sits at 68.9, short of overbought territory, though the 77 per cent annualised volatility is a reminder that this rally has been anything but smooth.

Bernstein, meanwhile, estimates that SK Hynix generated roughly $7.5 billion in High Bandwidth Memory revenue during the second quarter alone — a 25 per cent sequential increase. The technology, a critical enabler for AI data centres, remains the primary force behind the company’s ascent. Production capacity for HBM is already fully booked through 2026, and the company has quietly filed a confidential registration with the US Securities and Exchange Commission for a New York listing that bankers believe could raise between 10 trillion and 15 trillion won. Proceeds are earmarked for expanding the AI chip business and strengthening the equity base.

Yet clouds are gathering on the horizon. Exane BNP Paribas warns that the very same boom is sowing the seeds of overcapacity, potentially squeezing HBM prices as early as next year. Samsung Electronics, the other Korean memory giant, is accelerating its HBM4 production schedule for the second half of 2026, threatening to erode SK Hynix’s lead. While a looming general strike at Samsung was averted at the last minute after a tentative union deal, the risk of labour disruption across Korea’s semiconductor ecosystem has not fully dissipated. Furthermore, analysts flag a new bottleneck in ABF substrates — a key packaging material for advanced chips — that could delay production timelines even when the memory itself is available.

The supercycle narrative, however, has drawn strong support from other quarters. Nomura Securities has lifted its price target to 4 million won, arguing that memory makers deserve a structural growth valuation akin to foundry giants like TSMC. The brokerage sees a price-to-earnings multiple of 20 as appropriate for leading memory names. Meanwhile, the market’s enthusiasm is captured by the PLUS Global HBM Semiconductor ETF, which delivered a three-year return of 676.67 per cent through May 20. SK Hynix alone contributed 92.9 per cent to that performance over the last three months, underscoring how heavily the fund’s fate is tied to the memory powerhouse.

With the stock trading at roughly half of Shinhan’s new target and a US listing in the pipeline, the fundamental case for SK Hynix remains compelling on paper. The question is whether the pricing cycle can sustain the momentum long enough to let valuations catch up with the hype — and whether competitors, supply chains and labour markets will cooperate.