SK Hynix Rises 5.8% as JPMorgan Pushes Back on Memory Cycle Fears

SK Hynix shares climbed 5.8% on Wednesday, lifted by a JPMorgan assessment arguing that investors have priced in a memory-chip downturn too aggressively. The stock also drew support from an unexpectedly strong preliminary revenue outlook at Super Micro Computer, which bolstered confidence in demand for AI servers — and, by extension, for the high-bandwidth memory SK Hynix supplies to that market.

The two catalysts point in the same direction but carry different weight. Super Micro's forecast for its first fiscal quarter of 2027 beat expectations and lifted Korean chip names broadly. Yet the surprise originated at another company entirely; it was not a new revenue projection from SK Hynix and should not be read as one. Whether improved demand expectations translate into better business at SK Hynix still depends on the company's own manufacturing capabilities.

JPMorgan Challenges the Peak-Earnings Narrative

JPMorgan's note, published today, takes direct aim at fears that the memory cycle is about to roll over. The bank argues that a peak in earnings as early as the first half of 2027 is not sufficiently supported by evidence, and it expects tight supply-and-demand conditions for memory chips through 2028. That view runs counter to concerns about an imminent end to the cycle — though it remains a forecast, not proof that profits and demand will grow without setbacks.

The distinction matters: a possible downturn later is not the same as an earnings peak already at hand. JPMorgan sees insufficient evidence for the latter, which offers a different reading of the stock's recent weakness — falling expectations alone may not explain the decline; an exaggerated valuation of those risks could also be at work. Today's rebound fits the friendlier industry tone but does not settle the question of how long the memory cycle will run.

Buyback Ends a Month Ahead of Schedule

Flows in the stock itself add a second layer. SK Hynix completed its share repurchase program today, acquiring 24.07 million of its own shares for 40.0434 trillion won, according to MoneyToday. The papers, earmarked for full cancellation, represent roughly 3.3% of shares outstanding.

Two opposing effects now collide. The planned cancellation enhances the significance of the remaining shares, while the program's completion removes a steady source of buying demand. Media reports point to concerns that the supply-demand gap on the South Korean equity market could widen as a result. The program finished about a month earlier than planned, bringing forward the question of which buyers will replace the company's own demand. A constructive view of the operating cycle and short-term pressure from shifting trading flows are not mutually exclusive.

Dalian Upgrade Offers a Company-Specific Test

More substantive than the sympathy move with other technology names is news from Reuters that SK Hynix is upgrading its Chinese NAND facilities in Dalian to 240 or more layers, up from the 192 layers produced there currently. The modernization is intended to serve AI demand and strengthen competitiveness against Chinese rivals. It suggests the company is working on its production base rather than relying solely on improved demand expectations.

Caveats apply. Reuters confirmed that upgrades are underway but said specific production plans have not been disclosed, so neither a binding start date nor a particular earnings contribution can be derived. Separately, Reuters reported on October 15 that SK Hynix had sought US approval for additional American chipmaking equipment for Dalian, citing people familiar with the matter and linking the request to plans by its US unit Solidigm for a NAND fab in the United States. A reported application is not a granted permit, and keeping the two apart guards against mistaking expansion intentions for secured progress.

Capital Returns Await Concrete Decisions

Hana Securities expects at least 30 trillion won in additional capacity to return capital to shareholders out of free cash flow — an analyst estimate, not a distribution already resolved. SK Hynix plans to present further shareholder-return measures on October 28, 2026.

For investors, that leaves two separate yardsticks. The operating thesis hinges on whether the expected memory shortage persists; support from capital measures depends on concrete resolutions. JPMorgan's assessment argues against a prematurely assumed earnings peak, but it substitutes neither for confirmation in the business figures nor for new commitments on capital returns.