Micron vs. SK Hynix: As HBM Demand Continues to Surge, Which Memory Stock Deserves More Attention?

In the past, memory chips were viewed as typical cyclical products. When consumer electronics demand grew while supply fell short, DRAM and NAND prices rose, expanding memory makers' profits; once new capacity came online en masse, oversupply would cause a rapid decline in prices and profits.

The AI wave has not completely eliminated this cycle, but it is altering the structure of memory demand.

Large model training and inference require the continuous transfer of massive amounts of data between GPUs and memory. Traditional DRAM struggles to meet the bandwidth requirements of AI accelerators, whereas HBM vertically stacks multiple memory dies and shortens data transmission distances, boosting bandwidth while reducing power consumption.

As AI model parameters increase, context windows expand, and AI inference requests continue to grow, next-generation GPUs require more HBM. Even if AI chip shipments show no significant growth, higher HBM capacity per chip could continue to push up overall demand.

Manufacturing HBM is significantly more difficult than standard DRAM. Die stacking, through-silicon vias, yield control, and advanced packaging require extensive technical expertise, preventing new capacity from creating effective supply in the short term. This grants manufacturers capable of mass-producing HBM stronger pricing power and clearer order visibility.

Currently, the global HBM market is highly concentrated. Counterpoint statistics show that in the first quarter of 2026, SK Hynix held an HBM market share of approximately 58% by revenue, while Micron and Samsung accounted for about 21% each. However, SK Hynix's share fell from the same period last year, as Micron and Samsung narrow the gap.

SK Hynix's biggest advantage lies in its long-term technical expertise and leading market share in the HBM market.

The company began R&D on HBM long before the AI boom emerged and successively commercialized multiple generations of products. When generative AI drove rapid growth in HBM demand, SK Hynix already possessed mature manufacturing experience, customer qualifications, and volume supply capabilities.

This first-mover advantage helped SK Hynix establish close partnerships with AI chipmakers such as Nvidia. Because HBM requires co-design with GPU architectures and lengthy qualifications, once a supplier enters a customer's platform, it is typically difficult to replace in the short term.

SK Hynix has already begun volume shipments of HBM4 in the second quarter of 2026 and plans to further expand output in the second half of the year. The company has also signed long-term agreements with about 10 key customers, enhancing the predictability of future revenue.

However, SK Hynix's advantages come with risks. Its HBM business is highly dependent on Nvidia and a small number of major cloud computing customers. If AI capital expenditures slow down, or if customers increase their purchasing proportions from Micron and Samsung, the company's profitability could be significantly impacted.

In contrast, Micron Technology's biggest advantage is a more balanced product portfolio and greater room for market share gains.

Micron not only provides HBM, but also covers server DRAM, NAND, enterprise SSDs, automotive, and mobile memory. This enables the company to benefit simultaneously from AI training, inference, data storage, and edge computing demand, rather than relying on a single product.

Although Micron's HBM market share lags significantly behind SK Hynix, the gap is narrowing. The company has already begun volume shipments of HBM4 for major customer platforms and provided qualification samples to multiple customers, with HBM4E scheduled for mass production in 2027.

Micron is also the only major HBM supplier headquartered in the United States. Amid the U.S. push to localize the semiconductor supply chain, this status helps the company obtain policy support and compete for orders from U.S. cloud computing enterprises and government-related entities.

However, Micron still needs to prove that it can expand HBM capacity while maintaining yields and profit margins. The company's construction of advanced manufacturing facilities in the U.S. requires substantial capital investment, and if AI demand growth falls below expectations, heavy depreciation could weigh on future profitability.

From a business competitiveness perspective, SK Hynix remains the leader in the AI memory supercycle. It boasts a higher HBM market share, more mature manufacturing experience, and long-standing partnerships with key customers such as Nvidia. For investors seeking direct exposure to the HBM growth trend, SK Hynix presents a clearer business thesis.

In terms of growth elasticity, Micron Technology offers greater room to catch up. SK Hynix already holds more than half of the HBM market, making further share gains relatively challenging; Micron's current market share of around 21% implies that securing more AI chip design orders could drive above-industry-average growth for its HBM business.

Regarding valuation, neither company looks expensive. Based on market consensus earnings estimates for the next fiscal year, Micron trades at a forward P/E ratio of roughly 5.7x, compared with about 5x for SK Hynix; based on analysts' projected peak-cycle earnings in 2028, Micron trades at around 5.5x, while SK Hynix stands at roughly 3.5x.

However, investors should not judge a stock as cheap solely based on a low P/E ratio. Memory makers' profits often surge when product prices hit cyclical highs, artificially dampening the P/E ratio. If DRAM and NAND supply increases and prices fall, current earnings forecasts could be revised downward, driving actual valuations higher again.

Overall, the two stocks appeal to different investment theses:

• For investors who prioritize HBM leadership, the Nvidia supply relationship, and a lower valuation, SK Hynix is more attractive.
• For investors who place greater value on a U.S. domestic supply chain, product portfolio diversification, and potential HBM market share gains, Micron Technology is more noteworthy.
• If there are concerns that memory prices are approaching a cyclical peak, neither company should be viewed as a low-risk investment simply due to a low P/E ratio.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.