SK Hynix Shares Hit New High Above 1.6 Million Won; Where Does the Upward Momentum Come From?

TradingKey - During the Asian trading session on May 6, South Korean memory chip giant SK Hynix surged over 10% intraday, with its closing price exceeding 1.6 million won, hitting a record high for the second consecutive trading day. The company's market capitalization surpassed 1,100 trillion won, with a year-to-date cumulative gain of over 146%.

Holding company SK Square climbed as high as 1.149 million won intraday, a gain of 15.94%. Boosted by the semiconductor sector, the KOSPI index rose above 7,300 points during the session, also reaching a record high.

[Source: Yahoo Finance]

The current rally in SK Hynix's stock price stems primarily from two factors. Google ( GOOGL ), Microsoft ( MSFT ), Amazon ( AMZN) and Meta ( META )—the four tech giants—are expected to invest a total of approximately $700 billion in AI-related capital expenditures in 2026, boosting market expectations for memory chip demand. At the same time, the 192GB SOCAMM2 memory modules previously mass-produced by SK Hynix have been supplied exclusively for Nvidia's ( NVDA) Vera Rubin platform. This product ports low-power mobile DRAM into servers, not only doubling the bandwidth but also reducing power consumption by more than 75%.

Vera Rubin is expected to be delivered in the second half of 2026; however, there is a risk of delay due to issues such as CoWoS packaging yields at TSMC. To address this variable, SK Hynix plans to reduce HBM4 shipments by 20% to 30% in 2026, while utilizing the freed-up capacity to manufacture HBM3E and server-grade LPDDR.

Analysts believe this is not a decrease in demand, but rather that Nvidia's additional HBM3E orders exceeded expectations. SK Hynix has decided to prioritize current supply, maintaining its total annual HBM shipment target at approximately 20 billion Gb. Meanwhile, Micron ( MU) was not included in the HBM4 supplier list for Nvidia's Rubin platform, further consolidating the duopoly where Samsung and SK Hynix capture the entire supply share, making SK Hynix's bargaining power more stable.

Strong financial performance has also supported the stock's movement. SK Hynix disclosed its results for the first fiscal quarter of 2026 on April 23, reporting revenue of 52.58 trillion won, up 198% year-over-year. Operating profit reached 37.61 trillion won, a 405% increase, with an operating margin of 72%. Net profit hit 40.35 trillion won, nearly quadrupling. All three major indicators reached record highs for the company and exceeded market expectations.

Following the earnings release, several brokerages raised their target prices. Daol Investment & Securities hiked its target from 1.6 million won to 2.1 million won, the highest in the market. Korea Investment & Securities and KB Securities set targets of 2.05 million won and 2.0 million won, respectively, both believing that the structural imbalance between memory supply and demand will persist beyond 2027. JPMorgan ( JPM) raised its target price from 1.55 million won to 1.8 million won. Based on the current share price of approximately 1.6 million won, these target prices still suggest significant upside potential from current levels.

Beyond earnings, long-term supply agreements have locked in the company's future revenue scale in advance. The company's entire production capacity for 2026 is already sold out, and it has signed a three-year DDR5 long-term agreement with Microsoft, expected to reach tens of billions of dollars. A five-year general-purpose DRAM long-term agreement with Google is also in progress. With the three major manufacturers allocating over 90% of their advanced capacity to HBM and high-end memory, standard DRAM is already in severe shortage, and the overall memory market has entered a seller's market.

The Samsung Electronics labor union has threatened an 18-day large-scale strike starting May 21, which may assist SK Hynix's bargaining power in the short term; however, its long-term impact on the South Korean semiconductor ecosystem remains to be seen. If the delivery of Vera Rubin is pushed back further, it will affect the mass production schedule for HBM4.

It should be noted that the current stock price factors in high performance expectations. If subsequent second-quarter earnings fail to meet the most optimistic forecasts, downward pressure for a correction will increase. Whether the timing of NAND and DRAM oversupply arrives earlier than expected, and whether Micron will pass HBM4 certification at a later stage, are variables that require continuous tracking.