Goldman Sees 3.5 Million Won in SK Hynix as Foreign Investors Head for the Exits

Goldman Sachs has raised its 12-month price target on SK Hynix to 3.5 million won, setting up a stark contrast with the mood on the trading floor after one of the roughest weeks for Asian chip stocks in years. The US investment bank's bullish call, issued on Sunday, rests on a global memory shortage it expects to persist through 2028.

The recommendation lands just days after the South Korean memory maker suffered a 24% weekly decline in the benchmark Kospi — its steepest percentage drop since November 2008. SK Hynix ended Friday's session at 1,272,000.00 KRW. Even so, the stock remains up 96% since the start of the year.

A Record Retreat by Overseas Funds

Data from the Korea Exchange lays out the scale of the selling. Foreign investors dumped SK Hynix shares worth a net 5.35 trillion won over the week, cutting the overseas ownership stake to 48.85% — the lowest level since December 2021.

Behind the exodus sits a mix of worries: mounting doubts over whether the billions being poured into artificial intelligence data centres will pay off soon enough, and fresh anxiety about US interest rates after stubborn inflation readings. Chip stocks also retreated on Wall Street, as reported by Reuters and the Associated Press, feeding the selling pressure across Asian exchanges.

Some market watchers argue the reaction has gone too far. Cho Sang-hyun of Hyundai Asset Management called Friday's slide a temporary overreaction to speculative fears of an AI valuation bubble. The sector's fundamentals remain sound, he said, because long-term supply contracts for high-bandwidth memory (HBM) effectively cap the risk of a build-up in inventories.

ChangXin Progress Adds a Second Front

Sentiment in the memory segment took a further knock from reports that Chinese rival ChangXin Memory Technologies had made technological headway on denser DRAM designs. The developments, which surfaced roughly a week ago, stoked concerns about intensifying competition in conventional memory over the medium term.

Goldman, for its part, does not see the established producers' technological lead under immediate threat. Years are likely to pass before new rival products achieve reliable yields in mass production and clear the demanding qualification processes required by industrial customers. The bank expects supply of standard DRAM, NAND flash and HBM to be even tighter in 2027 than in 2026.

Product Rollout and a Dalian Clarification

Beyond the market turmoil, SK Hynix used the OCP Global Summit to showcase memory solutions for future AI infrastructure, including its MARS rack-scale architecture and progress on High Bandwidth Flash. It also displayed a second-generation 256-gigabyte CXL 3.2 memory module, which the company says delivers more than double the bandwidth of its predecessor while improving energy efficiency by around 30%.

Management also pushed back on reports of talks with the US government over factory investment. SK Hynix made clear it is not seeking a capacity expansion at its Mod-B facility in Dalian, China, which was completed in 2023. Equipment installation there is proceeding in coordination with, and under authorisation from, the relevant US authorities.

Earnings and Payouts in Focus

Attention now turns to the company's third-quarter results, scheduled for release on 27 October 2026. Hana Securities estimates operating profit of 7.79 trillion won for the quarter and flags the prospect of additional shareholder distributions of at least 3 trillion won.

SK Hynix has already reaffirmed 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 to 2027 to shareholders.