Korea Investment & Securities identified SK hynix as its top pick in semiconductors. It raised the target stock price from 270,000 won to 300,000 won and recommended a 'buy' rating. On the 24th, SK hynix's closing price was 209,500 won.
On the 25th, Chae Min-sook, a researcher at Korea Investment & Securities, noted, “It is important to highlight that SK hynix is the only company capable of supplying all products from Nvidia's H20-oriented 4th generation high bandwidth memory (HBM3) 8-high (8hi) to GB300-oriented 5th generation (HBM3e) 12-high (12hi).
As clients like Nvidia frequently change their roadmaps, the lifecycle of products is gradually shortening. To maintain market share as the top supplier, it is essential to align with clients' product launch schedules, enabling the company to also enjoy initial price premiums for new product launches. Chae further stated, “Accordingly, we maintain our top pick opinion for SK hynix in the sector.”
Korea Investment & Securities adjusted its operating profit estimates for this year and next year up by 15.8% and 15.6%, respectively, reflecting an increase in SK hynix's HBM sales volume and the potential rise in average selling price (ASP) of double data rate (DDR)5 for servers.
Chae emphasized, “Amid anticipated large-scale investments in AI data centers, including the Stargate project, the benefits for SK hynix, which holds the top market share in server DRAM and HBM, will be the most significant.”
As of the end of last month, the inventory levels of memory suppliers were between 9 to 10 weeks for DRAM and 14 to 15 weeks for NAND. Chae noted, “SK hynix's blended ASP for DRAM is expected to rise in the first quarter due to the expansion of HBM sales and the increased proportion of HBM3e 12hi.”
He stated, “The current memory cycle is driven by AI-led data center cycles, and SK hynix is leading this cycle,” adding, “This is why SK hynix's premium must be maintained compared to competitors.”