Goldman's 3.5 Million Won Bet Confronts a Record Foreign Exodus From SK Hynix

Goldman Sachs raised its 12-month price target on SK Hynix to 3.5 million Won on Sunday, doubling down on the memory chipmaker just as international investors staged their largest retreat from the stock in years.

The US investment bank's bullish call rests on a global memory supply squeeze it expects to persist through 2028. It also argues that the technological lead of established producers is safe for now: years will likely pass before rival products achieve reliable mass-production yields and clear the demanding qualification processes demanded by industrial customers.

The upgrade lands at the end of one of the roughest trading weeks in recent memory for Asian semiconductor markets. SK Hynix shares fell 24% over the week on the Korean benchmark index and closed Friday at 1,272,000.00 KRW — the steepest weekly percentage decline since November 2008. The stock is still up 96% since the start of the year.

Foreign Investors Pull More Than 5.35 Trillion Won

Korea Exchange data lays out the scale of the pullback. Foreign investors sold SK Hynix shares worth a net 5.35 trillion Won in the past week alone, cutting the overseas stake in the company to 48.85% — the lowest level since December 2021.

Behind the selling wave: mounting doubts about the near-term profitability and financing of multibillion-dollar AI data center projects, compounded by worries over US interest rates. Reuters reported that unexpectedly hot US inflation data fueled fears of further action by the Federal Reserve, deepening skepticism about funding future large-scale AI ventures.

Market watchers, though, are increasingly reading the reaction as overdone. Cho Sang-hyun of Hyundai Asset Management called Friday's slide a temporary overreaction to speculative fears of an AI valuation bubble. The chip industry's fundamentals remain stable, he argued, because long-term supply contracts for high-bandwidth memory (HBM) effectively cap the risk of inventory gluts.

KB Securities Sees Stable Operating Demand

The head of research at KB Securities struck a similar note on Friday, saying the recent declines at SK Hynix and Samsung Electronics mostly reflected weak buying interest and a jittery investor mood rather than any deterioration in semiconductor fundamentals. Operating demand for memory products, he said, remains steady.

Sentiment found little help from Elon Musk. According to media reports, he described memory makers' pricing as extortionate and singled out US rival Micron for praise — criticism observers read as a direct message to dominant producers such as Samsung Electronics and SK Hynix. So far, the leading Asian suppliers' price discipline in that segment shows no sign of cracking.

Dalian Expansion Reports Denied

Beyond the market turmoil, SK Hynix's operations in China drew scrutiny. The company pushed back Friday against reports that it was unilaterally expanding output at its Dalian site, stating that no capacity increase is planned for the Dalian Mod B facility completed in 2023. Production equipment is being installed in ongoing consultation with authorities and under explicit approval from the US government, the company said.

Goldman's supply outlook sees standard DRAM, NAND flash and HBM conditions tightening further in 2027 compared with 2026. Attention now turns to the company's quarterly results, which media reports say will be published on October 28, 2026 — a date expected to show how margins in the high-performance memory business are actually developing.

Hana Securities estimates SK Hynix's operating profit for the past third quarter at 7.79 trillion Won and flags additional shareholder payouts of at least 3 trillion Won. The company has already confirmed plans to buy back and cancel 40 trillion Won of its own shares and to return more than half of its free cash flow from 2025 through 2027 to shareholders.