SK Hynix's Two-Sided Week: A Price Target Upgrade, a Pay Deal, and a Global Selloff

Bank of America upgraded SK Hynix to Buy with a $250 target, citing AI memory demand, as the stock slipped 2.2% amid a broad macro selloff.

Bank of America handed SK Hynix a fresh vote of confidence on Wednesday, upgrading the memory maker to Buy with a $250 price target, citing accelerating demand for AI-related memory chips. The call reinforces a theme that has been building for months around the Korean manufacturer.

Yet the market's immediate reaction told a more complicated story. By Friday the stock had slipped to 1,812,000 Won, down 2.2% from Thursday's close — a pullback that sits within a broader seven-session gain of roughly 10%. The dip looks less like a verdict on the upgrade and more like profit-taking after a strong run.

A Pay Package Reworked to Win Over the Floor

Behind the trading screen, management was dealing with a more immediate problem: its own workforce. SK Hynix has revised its compensation proposal to employees, lifting the cash portion of performance bonuses to 50% from the 40% originally on the table. Staff can now raise their equity component in 10-percentage-point increments all the way to 100%, and deferred bonus payments from the prior year are being brought forward.

The concession followed a narrow rejection at the end of August, when production workers voted down the earlier, more equity-heavy offer by a margin of just 25 votes. Employees will vote on the revised package on September 15 and 16.

Macro Forces, Not Company News, Drive the Slide

The stock's recent weakness has little to do with SK Hynix itself. A broad Wall Street selloff did the damage: oil punched through the $100 mark, the yield on ten-year US Treasuries climbed to a multi-year high, and investors grew jittery over stubborn inflation after unexpectedly strong August US producer price data. The Dow, S&P 500 and Nasdaq all closed lower Thursday, with Nvidia, Micron and Intel also retreating.

Even so, the numbers over a longer horizon remain striking. SK Hynix is up 8.9% over seven days and 19% over 30 — a reminder of just how wide the stock's swings have become.

The Kospi's Two-Stock Problem

That volatility has caught the attention of the Bank of Korea. According to a central bank analysis, Samsung Electronics and SK Hynix together accounted for 99% of the Kospi's climb from 8,000 to 9,000 points — and for 69.3% of the subsequent drop from 9,100 to 5,500. The BOK also flagged heavy leverage through overseas ETFs tracking both stocks, which at times held more assets under management than their domestic counterparts. A deputy governor of the central bank called for tighter monitoring.

Supply Squeeze Meets Structural Demand

Strip away the daily noise and the operating picture stays firm. JPMorgan recently initiated coverage of the ADR with an Overweight rating and a $245 target, pointing to a multi-year AI memory supercycle, SK Hynix's lead in HBM chips, and supply agreements covering more than half of its capacity. Analyst Jay Kwon projects annual earnings growth of 34% for 2026 through 2028.

Korea's export data back up the demand story. Semiconductor shipments surged 270.1% year-on-year in the first ten days of September, making up 47.1% of total exports. Reuters reported on September 5 that Korea's export growth is being driven largely by rising chip prices, as the AI investment boom tightens memory supply — with SK Hynix named as a prime beneficiary.

The flip side of that boom is power. Korea's energy minister said Tuesday that electricity demand will rise sharply on the back of expanded production at SK Hynix and Samsung Electronics, plus new AI data centers. Projects once penciled in for around 2045 are being pulled forward to the early 2030s. State utility KEPCO has proposed that SK Hynix make an upfront payment of 5 trillion Won for power supplies through 2031 to help fund grid expansion — though KEPCO stressed that participation, interest rates, payment size and duration are all still undecided. SK Hynix declined to comment on the proposal.

Kioxia Rumors Laid to Rest

One long-running speculation was put to bed Wednesday. Kioxia chief Hiroo Ota said his company is not in talks with SK Hynix about closer manufacturing cooperation, citing antitrust concerns that would rule out joint production. An SK Hynix representative confirmed no discussions are taking place. For investors, that removes consolidation hopes from the table — while leaving the core AI memory demand story, freshly endorsed by Bank of America, very much intact.

Meanwhile, the US and South Korea are discussing semiconductor investment in the US as part of ongoing tariff talks, with SK Hynix named alongside Samsung as one of the country's two major memory producers.

Inventory levels add another layer of tension: memory stockpiles at Samsung and SK Hynix fell below ten days in the third quarter, a shortage that could further squeeze supply of DDR5 memory, SSDs and GPUs.

What emerges is a split-screen picture. The week's decline tracks global macro anxiety, not any company-specific setback, while the structural case for AI memory remains unshaken. The revised labor deal offers at least some operational certainty — ahead of a workforce vote on September 15 and 16 that will settle the matter.