SK Hynix, the South Korean semiconductor giant, saw its shares skyrocket over 9% on Thursday following the announcement of its latest high-bandwidth memory (HBM) chip, the HBM3E, entering mass production. This cutting-edge chip, featuring 12 layers, boasts a 50% capacity increase compared to its predecessor, the eight-layer version. The move positions SK Hynix as a leader in the fiercely competitive AI memory market, where demand is surging due to rapid advancements in AI technologies.
The company, a major supplier to industry giants like NVIDIA, plans to deliver these advanced HBM3E chips to unnamed customers before the year’s end. This aggressive push follows Samsung Electronics’ July announcement of its own HBM3E 12-high units, which will be supplied to customers in the second half of 2023. Micron Technology Inc., another key player in the memory market, also revealed earlier this month that it is shipping production-ready HBM3E 12-high units to major industry partners for evaluation.
The positive news about the HBM3E launch comes amidst recent stock price fluctuations for SK Hynix. Last week, the company’s shares reached their lowest point since February after Morgan Stanley downgraded its stock rating, citing concerns over deteriorating memory market conditions. This downgrade also saw the target price slashed to 120,000 won from 260,000 won. However, SK Hynix has been buoyed by the growing optimism surrounding the AI boom. In July, both Goldman Sachs and Citigroup predicted further growth for the company, driven by strong demand for AI and positive earnings forecasts. Goldman Sachs raised its stock-price target to 290,000 won, while Citigroup increased its prediction to 350,000 won.
Further bolstering the positive outlook for SK Hynix is the commitment from its parent company, SK Group. The conglomerate announced a massive $56 billion investment in AI and semiconductor technology by 2026. This investment aims to strengthen the company’s supply chains for emerging technologies, including high-bandwidth memory chips. This move demonstrates a clear commitment to future growth and reinforces the company’s leading position in the AI memory market.
As of Thursday’s close, SK Hynix is trading at 180,100 won, with a significant 8.95% jump. This strong performance reflects the market’s positive reaction to the HBM3E launch. Year-to-date, the stock has gained 26.47%, demonstrating the ongoing confidence in the company’s future prospects.
