The breakneck surge in memorychip stocks is intensifying, sending the market capitalizations of SK Hynix Inc and Micron Technology Inc above US$1 trillion for the first time, as investors bet the artificial intelligence (AI) boom would lead to a sustained revaluation of the industry.
SK Hynix rose 9.3 percent in South Korea yesterday, taking its 12-month gain to more than 1,000 percent and becoming the third Asian company to join the US$1 trillion club after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co. Samsung had crossed the milestone earlier this month.
Micron soared 19 percent on Tuesday, the most since 2011, after a UBS Group AG analyst said the stock might double over the next year, while Samsung’s shares rose as much as 8 percent before paring gains to close up 2.3 percent yesterday.
Photo: Bloomberg
The three leading makers of high-bandwidth memory (HBM) now sit at the chokepoint of the global AI buildout, with their products forming a critical bottleneck for data-center expansion. Analysts expect memory shortages to last through next year, giving them unusual pricing power over the world’s largest technology companies.
In the fourth quarter of last year, SK Hynix controlled 57 percent of global HBM market share by revenue, Counterpoint Research’s data showed. Samsung and Micron followed with 22 percent and 21 percent, respectively.
Last month, SK Hynix reported a fivefold jump in quarterly profit, while anticipating that HBM demand would exceed supply in the next three years.
Meanwhile, the company has filed to list US depositary receipts this year. If the plan pans out, it would rank among the biggest New York debuts by a foreign company, giving US investors another way to play AI memory trade.
A potential listing in the US would act as a catalyst, Barclays PLC analysts including Simon Coles wrote in a note earlier this month. SK Hynix would also continue to benefit from favorable product pricing, with supply tightness to continue.
“We expect SK Hynix to remain the leader” in high-bandwidth memory, they wrote.
Despite the euphoria, some analysts are concerned that the surge might not prove to be durable. The rally is built on the assumption that earnings would increase at an astronomical pace, and any easing of supply bottlenecks or slowdown in AI capital expenditure could lead to reversals.
Separately, Samsung union members yesterday voted in favor of a compensation deal that would hand chip workers an average bonus of about US$340,000, staving off a strike that threatened to disrupt global chip supply.
The company’s largest union said the deal was signed after about 74 percent of its members voted in favor of the agreement. Workers accepted a wage proposal that was tentatively agreed by labor leaders last week, just 90 minutes before a planned strike at Samsung.
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