SK Hynix’s P/ E Coup Over Samsung Caps a Shift in How the Market Prices Memory Chips

SK Hynix forward P/E tops Samsung for first time, driven by AI HBM demand, supply crunch, and Samsung labor unrest. Shares near $1 trillion market cap.

For the first time in their long rivalry, SK Hynix commands a higher forward price-to-earnings multiple than Samsung Electronics. The 2026 forward P/E of the smaller memory specialist stands at 6.79x, a whisker above Samsung’s 6.77x. Three months ago Samsung led by a comfortable margin of 8.08x versus 5.28x, a gap that has now been wiped out and reversed.

The reversal is no mere accounting curiosity. It reflects a fundamental re-rating as AI-driven demand for high-bandwidth memory rewrites the rules of the semiconductor cycle. SK Hynix, the dominant supplier of HBM3E to Nvidia and other hyperscalers, is being treated less as a cyclical commodity play and more as a structural growth story.

Stock on a Rocket Toward $1 Trillion

The market’s enthusiasm has lifted SK Hynix shares nearly 191% since the start of the year, putting them at 1,970,000 Korean won – within a hair’s breadth of the 2 million won milestone touched in pre-market trading on Thursday. The company’s market capitalisation has swelled from below $100 billion 16 months ago to roughly $900 billion today, placing it in the same valuation league as Walmart and Berkshire Hathaway.

The rally has been white-hot: 19.11% over the past seven days, 78.6% over 30 days. The current level represents a fractional dip from the 52-week high set the day before, which analysts attribute to normal profit-taking in a steep uptrend.

Supply Scarcity Is the Engine

SK Hynix has confirmed that its entire portfolio – DRAM, NAND and HBM – is fully sold out, leaving the company unable to fulfil all customer orders. Goldman Sachs recently raised its DRAM supply-gap forecast from 3.3% to 4.9%, warning of the tightest market in 15 years.

Morningstar analyst Jing Jie Yu expects chip prices to peak in 2027, with SK Hynix’s operating margin climbing from 48.6% in 2025 to 75.7% in 2026 and 77.3% in 2027. Hana Securities analyst Rok-ho Kim sees supply-demand conditions tightening even further in the second half of 2026.

The company is already preparing the next technological leap: sample distribution of HBM4E chips is slated for the second half of 2026, with commercial mass production expected in 2027. In April, SK Hynix received the IEEE Corporate Innovation Award in New York, its first such honour, for the stable mass production of every HBM generation.

Samsung’s Labour Woes Become SK Hynix’s Opportunity

A key catalyst behind the valuation shift is the labour unrest at Samsung. State-mediated talks between Samsung and its largest union collapsed, raising the risk of an 18-day strike starting May 21. JPMorgan estimates that the wage increases demanded could slash Samsung’s operating profit by 7% to 12%.

The spillover effect is already visible. Union chief Choi Seung-ho confirmed that more than 200 Samsung engineers have defected to SK Hynix over the past four months, lured in part by a bonus scheme that abolished its cap last September and ties 10% of annual operating profit to employees for a decade. Apple is reported to be evaluating whether to shift some memory orders from Samsung to SK Hynix. In the semiconductor business, once a customer validates a new supplier, switching back is rare – the cost and time of re-certification are prohibitive.

A Korean Index Increasingly Bet on Two Chips

SK Hynix and Samsung together now account for 51.5% of the KOSPI200 index, up from 38.7% at the start of the year, an increase of 12.8 percentage points. The concentration amplifies both the rally’s power and its vulnerability: a simultaneous downturn in both stocks would hit the entire market instantly.

What Analysts Are Saying About Value

Despite the run-up, SK Hynix still appears cheap compared to its US rival. Eduardo Marques of Pertento Partners notes that the stock trades at about six times trailing earnings, versus roughly ten times for Micron Technology. He also points out that SK Square, the parent company, offers a 47% discount to the chip subsidiary’s valuation. UBS has lifted its price target on SK Hynix from 1.55 million won to 1.7 million won, while SK Securities highlights that the 12-month forward P/E is only about 5.2.

The Long Game: HBM4 and Capacity Expansion

Samsung remains the most credible challenger. If the group achieves mass production of HBM4 in the second half of 2026, analysts believe SK Hynix’s HBM market share could slip from its current dominant position to 50-60%. New capacity at SK Hynix’s Cheongju and Yongin facilities is expected to come online from mid-2027. Until then, the battle for HBM4 supremacy will determine whether the new P-E premium holds – and whether this re-rating is a cyclical blip or a new normal.