SK Hynix's AI Memory Squeeze Extends to 2028 as US Expansion and a $17 Billion Power Bill Take Shape

Analysts see HBM demand outpacing supply through 2028, with JPMorgan projecting 63% annual growth and SK Hynix holding about half of Q2 HBM revenue.

Demand for high-bandwidth memory is running so far ahead of supply that SK Hynix could enjoy a seller's market well into the next decade, according to analysts who have grown increasingly bullish on the South Korean chipmaker.

Chris Caso points to persistent price gains in the memory segment as the basis for his upgraded outlook. In his view, global demand should continue to outstrip supply through at least 2028. He also expects the company to generate enough free cash flow over the next two years to fund buybacks equivalent to roughly a third of its entire market capitalization.

The optimism rests on structural forces rather than a cyclical upswing. AI accelerators must process enormous volumes of data in the tightest possible space, which makes high-speed memory modules an indispensable component. Leading chip suppliers are already negotiating with equipment makers over new production steps such as glass substrates, a move aimed at stacking even more HBM layers onto AI processors.

JPMorgan Sees 63% Annual Growth in HBM Demand

JPMorgan likewise lists SK Hynix among its preferred names in the sector and projects average annual growth of 63% for worldwide HBM demand through 2028. That market momentum feeds directly into earnings expectations, with current estimates for the third quarter pointing to record operating results.

The company's dominant position in high-performance memory is not in dispute. Research from Counterpoint shows that roughly half of global HBM revenue in the second quarter went to SK Hynix.

Shares closed yesterday at KRW 1,862,000.00, up 1.2%, bringing the year-to-date advance to 187%.

Washington Options Multiply as Ohio Talks Stay Exploratory

Beyond the earnings story, SK Hynix is mapping out how to build a US footprint. One model under consideration, first reported by Reuters, would involve leasing part of an Intel facility in Ohio to manufacture memory chips on American soil. The company stressed at the time that talks with Intel remain purely exploratory, with no decisions reached and no final plans drawn up.

A second avenue runs through subsidiary Solidigm, which is examining the possibility of locating NAND chip production in Upstate New York. SK Hynix has said no concrete plans have been confirmed for that initiative either, though market participants are tracking the strategic moves closely.

Korean Utilities Push Back on KRW 25 Trillion Grid Demand

Closer to home, the infrastructure bill for Korea's semiconductor ambitions is becoming a battleground. A document prepared for a lawmaker revealed that SK Hynix and Samsung Electronics jointly rejected a demand from state utility Korea Electric Power Corp. KEPCO had sought an upfront payment of KRW 25 trillion to secure power supply for new semiconductor mega-clusters, a request both industry giants turned down.

The dispute underscores the grid strain sitting beneath the AI memory boom, even as the operational backdrop stays demanding on other fronts. SK Hynix's planned HBM plant in the US state of Indiana is reportedly facing a lawsuit, though the financial scope of the claim and the identity of the plaintiff were not immediately known. Currency swings and lingering US-China trade tensions remain on the radar of market observers as well.