SK Hynix's 24% Weekly Slide Draws Wall Street Pushback as Seoul Chipmaker Maps Life Beyond HBM

SK Hynix closed Friday at 1,272,000.00 KRW, a modest 0.8% gain that did little to offset a bruising seven-day stretch in which the stock shed 24% of its value. The memory maker now trades 57% below its 52-week high of 2,987,000.00 KRW, a gap that has turned the shares into a battleground between those betting on a structural downturn and those who see a rare buying opportunity.

The selloff gathered pace on two fronts. Reports that China's ChangXin Memory Technologies (CXMT) has advanced its denser 4F² DRAM architecture — with DDR5 server modules built on the design slated for release before year-end — stoked fears of a rapid shift in DRAM market share. Questions over CXMT's yields and customer certification remain unresolved, but the announcement alone was enough to spook traders already jittery about oversupply.

Adding to the noise, Elon Musk publicly branded memory chip pricing "extortionate," directing his criticism at Samsung Electronics and SK Hynix while praising US rival Micron. The remarks landed on an already defensive sector.

Valuation Argument Cuts Both Ways

Bank of America has pushed back hard against the pessimism. On its numbers, SK Hynix trades at just two to three times estimated earnings for 2027 and 2028 — a fraction of the four-to-seven times typical of previous upcycles. The bank expects firm contract prices and fat margins to hold through at least 2028, with earnings per share possibly slipping by a single-digit percentage that year but staying close to record levels. Fears of an abrupt end to the boom, in its view, are overdone.

Goldman Sachs is equally unpersuaded by the China threat. The US investment bank argues that the Korean incumbents' technological lead in advanced and high-performance memory will be hard to erode, forecasting that CXMT will cover only half of Chinese domestic demand even in 2028. It reiterated a 3.5 million KRW price target and expects memory scarcity to persist through 2028, helped by the large share of production capacity reserved for demanding AI memory.

A Roadmap That Reaches Past HBM

Management, meanwhile, is not standing still. Chief Development Officer Ahn Hyun said high bandwidth memory alone will not be enough to defend the company's lead in AI storage, projecting that global AI infrastructure could expand nearly twentyfold by 2030 compared with 2026. SK Hynix is therefore developing 3D-stacked DRAM, high-bandwidth flash and CXL-based memory pooling to lift data throughput in data centres and ease bottlenecks in complex model training.

The strategic pivot comes as investors brace for the 28 October outlook for the fourth quarter. Beyond operating guidance, market watchers expect SK Hynix could announce a special cash dividend. The company has already pledged to return more than half of cumulative free cash flow for 2025 through 2027 to shareholders.

On the earnings front, Kim Sun-woo of Meritz Securities reaffirmed his buy rating on 12 October and lifted his price target to ?3.2 million, forecasting third-quarter 2026 operating profit of ?80.1 trillion — above the broader market consensus. Whether demand for advanced server modules can offset headwinds in standard DRAM will be the test.