Goldman Lifts SK Hynix Target to 3.5 Million Won as Foreign Funds Beat a Record Retreat

Goldman Sachs has raised its 12-month price target for SK Hynix to 3.5 million Won, doubling down on the memory chipmaker just as overseas investors executed their heaviest withdrawal from the stock in years. The US investment bank's Sunday call rests on a supply squeeze it expects to persist through 2028.

The endorsement lands after one of the roughest trading weeks in recent memory for Asian semiconductor names. SK Hynix shed 24% over the week and closed Friday at 1,272,000.00 KRW — its steepest weekly percentage decline since November 2008. Even so, the shares remain up 96% since the start of the year.

Outflows Hit a Four-Year High

Korea Exchange data lays bare the scale of the exodus. Foreign investors dumped SK Hynix stock worth a net 5.35 trillion Won in the past week alone, dragging the overseas ownership share down to 48.85% — the lowest level since December 2021.

Behind the selling: mounting doubts over the near-term profitability and financing of multi-billion-dollar AI data centre buildouts, compounded by worries about US interest rates. The broader chip sector has also been jittery. Broadcom chief Hock Tan likened the enormous spending on artificial intelligence to gambling in a casino, while Chinese rival ChangXin Memory Technologies stirred competition fears in the server segment roughly a week ago with progress on a denser DRAM architecture.

Analysts Push Back on the Selloff

Market watchers are increasingly calling the reaction overdone. Cho Sang-hyun of Hyundai Asset Management described Friday's slide as a temporary overreaction to speculative fears of an AI valuation bubble. The industry's fundamentals remain sound, he argued, because long-term supply contracts for high-bandwidth memory (HBM) effectively cap the risk of inventory gluts.

SK Securities made a similar case on Friday, pointing to upward revisions in earnings estimates driven by expectations of tighter memory chip supply and rising HBM prices. A report by The Korea Times echoed the view that the recent slump was exaggerated, noting the market simply lacked sufficient support on the buy side. No deterioration in underlying earnings power was at play, according to market observers.

Goldman expects the supply picture for standard DRAM, NAND flash and HBM to be even tighter in 2027 than in 2026. The bank sees no near-term threat to the technological lead of established memory producers: years will likely pass before new rival products achieve reliable mass-production yields and clear demanding qualification processes at industrial customers.

Dalian Reports Rebutted

Uncertainty had also spread through media coverage of the company's international production network, with reports suggesting US subsidiary Solidigm was seeking approvals to ship semiconductor equipment to China. SK Hynix pushed back on Friday, stating that no capacity expansion is planned at its Dalian Mod B plant and that equipment installation proceeds in coordination with — and under authorisation from — US authorities.

Product Pipeline Presses On

Market turbulence aside, the company continues to advance its product lineup. At the OCP Global Summit it unveiled new data centre memory solutions, including a CXL-DDR5 module with 256 gigabytes of capacity and 80 gigabytes per second of bandwidth. According to the company, the unit is roughly 30% more energy-efficient than its predecessor.

Earnings to Settle the Argument

The decisive test comes soon. SK Hynix has scheduled its quarterly earnings call for 28 October. Hana Securities estimates operating profit of 7.79 trillion Won for the July–September quarter and flags the prospect of additional shareholder payouts of at least 3 trillion Won. The company 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 through 2027 to shareholders.