SK Hynix’s Yongin Megafactory and the No-Cap Bonus That Triggered a Samsung Exodus

SK Hynix ramps Yongin fab; HBM fully allocated through 2026. Samsung strike threat and engineer defections boost orders, driving market cap near $1 trillion.

The ground is about to break on the next phase of South Korea’s largest semiconductor cluster, and SK Hynix is already running out of room in its order book. In August, the company begins construction on the second phase of its first fabrication plant in Yongin, Gyeonggi Province — a sprawling complex with a total investment of roughly 31 trillion won, or $20.8 billion. Four manufacturing sites are planned in the long run, embedded in an ecosystem of material suppliers and equipment makers, as the memory maker scrambles to secure capacity for a market that shows no sign of cooling.

That demand is starkly visible in the numbers. SK Hynix’s HBM capacity for the entire year of 2026 is already fully allocated, the chief financial officer confirmed last October. The management has indicated that under-supply will persist well into 2027, with large tech clients even pushing to finance production lines and lock in future output — an extraordinary step that underscores just how tight the high-bandwidth memory market has become.

The company’s market capitalisation has soared to nearly $942 billion, inching toward the trillion-dollar mark. Shares have climbed roughly 169% year to date, though they slipped nearly 8% on Friday after touching a record high of 1,976,000 won. The stock now trades around 1,970,000 won, just below its 52-week peak, and sits more than 70% above its 50-day moving average — a measure of how steep the rally has been.

Unusually, it is not just SK Hynix’s own execution driving the momentum. The troubles of its fiercest rival, Samsung Electronics, have become an unexpected tailwind. After state-mediated negotiations failed to produce a wage agreement, Samsung’s largest union is threatening an 18-day strike starting 21 May 2026 that could disrupt chip production. Clients are expected to divert orders to SK Hynix and Micron in response.

The root of Samsung’s labour unrest traces directly to SK Hynix’s compensation model. Last September, SK Hynix agreed to distribute 10% of its annual operating profit to roughly 35,000 employees for a decade — with no cap. Based on the expected 2026 operating profit, that would translate into an average bonus of around $477,000 per head this year. The disparity has encouraged more than 200 key Samsung engineers to jump ship over the past four months.

The market, meanwhile, is rethinking how memory makers should be valued. For years, they were treated as pure cyclicals, with a single valuation metric applied across all segments. Now a growing consensus argues that the commodity DRAM and NAND businesses should be assessed separately from the high-margin HBM operations. UBS raised its price target on SK Hynix to 1.7 million won in May, boosting 2026 and 2027 earnings estimates by 22% and 29% respectively. The bank describes the current cycle as a memory super-cycle not seen in nearly 30 years. Morningstar’s Jing Jie Yu expects operating margins to surpass 77% by 2027, supported by long-term contracts from major clients — many reportedly ready to sign five-year agreements, signalling that few anticipate a supply relief before 2028.

On the product front, SK Hynix is already delivering HBM4 samples for Nvidia’s Vera Rubin platform, claiming roughly two-thirds of that chip’s requirements. Mass production began in February, and HBM4 revenue is expected to overtake the previous HBM3E generation from the third quarter. Samples of the next-generation HBM4E are slated for the second half of 2026, with mass production in 2027. The company is also testing Intel’s EMIB 2.5D packaging technology — still in the trial phase, with suitable materials for mass production still being sourced.

Yet the biggest risk factor remains Samsung. Although Samsung’s HBM4 yield still lags below 60%, it has secured qualification for Nvidia’s Vera Rubin platform. If Samsung manages to begin mass production in the second half of 2026, SK Hynix’s HBM market share could shrink to between 50% and 60%, potentially eroding the valuation premium the stock currently commands.