South Korea’s EUV Regulatory Overhaul Gives SK Hynix a Speed Boost as It Scales Capacity and Custom HBM Ambitions

South Korea slashes EUV inspection time from 34 to 9 days, boosting SK Hynix and Samsung. SK Hynix posts record Q1 results, crosses $1T market cap, and shifts to custom HBM.

South Korea’s trade and industry ministry has slashed the inspection time for extreme ultraviolet lithography equipment from 34 days to just nine, a move that directly accelerates the production expansion plans of both SK Hynix and Samsung Electronics. The new safety rules for high-pressure gas, effective next week, also slash pressure-test costs by roughly 500 million won per unit through the use of foreign inspection agencies. The regulatory tailwind comes just as SK Hynix chairman Chey Tae-won pledged to double the company’s wafer capacity within five years — one of the most ambitious output targets in its history.

Chey made the announcement on stage at Computex 2026 in Taipei, framing the move as a response to a structural supply deficit in memory chips that he expects to persist until 2030. The company is pouring massively higher capital expenditure into the ramp, though Chey did not specify exact spending figures. He also emphasized the need for more partnerships in Taiwan, extending beyond its existing ties with TSMC. Days later, Chey and SK Hynix CEO Kwak Noh-jung were seen at NVIDIA’s GTC Taipei event, where they outlined a parallel strategy: shifting from a pure commodity memory supplier to a custom-design partner under the banner of “Full-Stack AI Memory Creator.”

The centerpiece of that pivot is customized HBM, or cHBM — tailored high-bandwidth memory solutions built for individual customer architectures. Alongside cHBM, the roadmap includes HBM4, High Bandwidth Flash, and 3D stacked DRAM on logic, technologies that integrate memory and processing. The message from Chey and Kwak was clear: future competitive advantages will come less from sheer wafer volume and more from deep design integration with AI accelerator makers like NVIDIA. SK Hynix’s full HBM capacity for 2026 is already sold out, with some customers making full upfront payments to secure allocation.

That demand is reflected in the company’s first-quarter 2026 results. Revenue hit a record 52.6 trillion won, operating profit reached 37.6 trillion won, and net income came in at 40.3 trillion won. The operating margin was the highest on record. Cash and equivalents swelled by 19.4 trillion won quarter-over-quarter to 54.3 trillion won, while interest-bearing debt fell to 19.3 trillion won, leaving net cash of 35 trillion won. Management attributed the blowout quarter to rising AI infrastructure spending and stronger sales of HBM, server DRAM modules, and enterprise SSDs.

Last week, SK Hynix’s market capitalization crossed the $1 trillion threshold for the first time, joining Samsung Electronics and Micron Technology. The stock has surged 241.8% year-to-date, trading near its 52-week high at 2.31 million won. Despite the rally, the equity changes hands at roughly seven times expected earnings — a steep discount to the Philadelphia Semiconductor Index’s 27-times multiple. The relative valuation gap looks unsustainable given the earnings momentum, especially as multiyear supply contracts come up for renegotiation in 2027.

Institutional investors are taking notice. Richard Clode, co-manager of the $8.3 billion Janus Henderson Global Technology Leaders Fund — which has outperformed 96% of its peers this year — plans to add SK Hynix to his portfolio. He argues that the tight supply environment will allow the company to secure disproportionately higher margins when renewing contracts from 2027. “These stocks get cheaper as they rise, given the enormous earnings momentum,” Clode said. Goldman Sachs has also raised its 2028 operating profit forecast for SK Hynix by 24%, to 454 trillion won, driven by sustained AI demand.

In the HBM market, SK Hynix commanded a 58% share in the first quarter, versus 21% each for Samsung and Micron. The company’s net cash position of 35 trillion won provides ample ammunition for the higher 2026 capital spending needed to bring its M15X fab and Yongin cluster online, along with additional EUV lithography tools. With the KOSPI hitting a fresh all-time high on June 2, driven by AI optimism, SK Hynix’s stock added another 2% that day. The relative strength index sits at 68.9 — close to overbought territory but not yet flashing red — while volatility of 77.8% underscores the dramatic swings in the AI memory market.

For investors, the key question is whether SK Hynix’s dual push — capacity doubling on one side and custom HBM design on the other — can translate into durable customer lock-in. The GTC Taipei meetings and the separate “Korean Partner Night” hosted by NVIDIA, where senior SK Hynix executives discussed advanced memory, robotics, automotive, cloud, and IT services, suggest the relationship is deepening well beyond a single product cycle. As Chey and Kwak reposition the company from volume supplier to design partner, the stock’s valuation may increasingly reflect not just DRAM and NAND pricing, but the depth of its integration into the next generation of AI accelerators.