hynix

SK Hynix stated that the company's stock price is undervalued. The structural imbalance in chip supply and demand will continue in the short term. The AI revenue and cash flow of major customers will improve, and the investment burden of major customers in AI will be alleviated.

The storage chip manufacturer SK Hynix (SKHY.O) announced that its quarterly profit increased more than sevenfold year-on-year and announced an additional shareholder return plan worth 100 trillion won (approximately 75 billion USD) to be implemented in 2026. The company reported that its operating profit for the quarter ending in September reached 83.3 trillion won, exceeding the expected 76.7 trillion won; revenue rose to 104.6 trillion won, surpassing the expected 98.3 trillion won, with both metrics hitting historical highs for a single quarter.Driven by supply constraints, the company's operating profit margin remains at historically high levels. The company stated on Wednesday that it expects the shortage of storage chips to continue until 2030. The company's analysis suggests that the increasing technical difficulty of advanced processes and the long time required to build new semiconductor factories are limiting supply expansion. The company anticipates that in the short term, the application of artificial intelligence by businesses and consumers will drive storage demand, while in the medium to long term, physical artificial intelligence applications such as autonomous driving and robotics will become the driving force for demand growth.

SK Hynix stated that as AI takes on longer and more complex tasks, driving a surge in computing power and data processing demands, memory requirements will exceed previous expectations.

Insiders have confirmed that Solidigm, a U.S. subsidiary of SK Hynix (SKHY.O), is in discussions with the U.S. Department of Commerce regarding a $45 billion U.S. factory project.

SK Hynix will announce its Q3 2026 financial report after the U.S. stock market closes on Tuesday, along with a new shareholder return plan. The market is focused on the demand for high bandwidth memory (HBM), profitability, and whether a large special dividend will be issued. Other memory manufacturers such as Samsung Electronics and Kioxia Japan will also gradually announce their performance.The demand for AI infrastructure is driving an upward trend in the memory chip market. KB Securities analysts estimate that more than 70% of the memory that the two major Korean memory chip manufacturers plan to produce next year is covered by five-year supply agreements signed with large technology companies. The market is beginning to worry about the return on AI capital expenditures and financing costs, with investors paying more attention to order quality, the sustainability of future demand, and the pace of capacity expansion.Korean media previously reported that SK Hynix is considering issuing a special dividend of about 16 trillion won (approximately 12 billion USD); other reports suggest that the new shareholder return could reach as high as 60 trillion won (approximately 45 billion USD). These amounts have not been officially confirmed by the company. SK Hynix had previously announced a buyback and cancellation of treasury shares worth 40 trillion won and plans to use more than 50% of its free cash flow from 2025 to 2027 for shareholder returns.

Samsung Electronics and SK Hynix plan to start mass production and delivery of 8-layer HBM4 in the second quarter of next year, supplying it to NVIDIA.According to informed sources, NVIDIA will equip the 8-layer HBM4 based on the scale of the Rubin Ultra NVL rack, and it is expected that the proportion of 8-layer HBM4 will significantly increase starting from the middle of next year.

According to Bloomberg, two leveraged exchange-traded funds linked to SK Hynix will be liquidated and delisted just months after their launch in the United States, as current market enthusiasm for AI trading is gradually cooling.These two long-short products issued by Tradr ETFs provide traders with double the daily price fluctuations of the American Depositary Receipts of the South Korean chip manufacturer, as well as double the inverse daily returns. The ETF issuer stated in a statement that both funds will complete liquidation around November 12.

According to a report by the Korea Economic Daily, KB Securities expects that the combined operating profit of Samsung Electronics and SK Hynix will reach 157.1 trillion won from 2026 to 2027, which is 2.1 times the cumulative operating profit of 74.8 trillion won for both companies from 2000 to 2025. It is estimated that in 2027, the operating profits of Samsung Electronics and SK Hynix will be 55.5 trillion won and 38.9 trillion won, respectively, representing year-on-year growth of 51% and 50%.KB Securities stated that the demand for AI chips is driving a tightening of memory supply, and about 70% to 80% of the memory that both companies plan to produce in 2027 has been secured through long-term supply agreements signed with major global technology companies for five years. The price-to-earnings ratios of both companies have fallen to about 3 times, and the proportion of foreign ownership has dropped to its lowest level since the global financial crisis in 2008. KB Securities believes that the market may be underestimating the long-term profit growth potential.

According to the "Science and Technology Innovation Board Daily," South Korean memory chip companies SK Hynix and Samsung Electronics will announce their performance for the third quarter of 2026 this week, with SK Hynix set to release on Wednesday and Samsung Electronics on Thursday. The report states that with the rising demand for AI chips and increasing prices for memory chips, both companies are expected to deliver strong results, with a combined operating profit for the third quarter projected to reach 184.4 trillion won, approximately 139.1 billion dollars.Samsung Electronics' preliminary results released on October 8 show that third-quarter revenue increased by 127% year-on-year, reaching 195 trillion won; operating profit was 107.4 trillion won, approximately 80.17 billion dollars, compared to 12.17 trillion won in the same period last year, an increase of nearly 8 times. Analysts surveyed by FnGuide expect SK Hynix's third-quarter revenue to be 98.2 trillion won, with operating profit at 77 trillion won. In 2025, Samsung and SK Hynix's operating profits are projected to be 43.6 trillion won and 47.2 trillion won, respectively, totaling 90.8 trillion won. If these predictions come true, Samsung will become the first South Korean company to exceed 100 trillion won in quarterly operating profit.As of the market close on October 23, the stock prices of Samsung and SK Hynix have fallen by 36% and 52%, respectively, since the end of June. The report indicates that investors view the impressive financial reports as expected, with focus areas including HBM4 supply, long-term agreements, and shareholder returns. TrendForce predicts that the average selling price of HBM will increase by 121% next year compared to this year, and the production capacity of Samsung and SK Hynix for next year is already sold out. In the second-quarter financial report, Samsung disclosed long-term agreements with five data center customers, while SK Hynix finalized multi-year contracts with over ten customers. Samsung announced a shareholder return plan of 90 trillion to 110 trillion won this year and will determine a cash dividend of about 30 trillion won for the third quarter by the end of this month. SK Hynix announced a 40 trillion won buyback plan in August and halted the evaluation for Solidigm's IPO. Kim Dong-won, head of KB Securities, stated that despite the significant stock price correction, the profit expectations for both companies have been raised, and the key catalyst for stock revaluation is expected to be the sustainability of profit growth and whether shareholder returns can be further increased.

According to an exclusive report by the East Asia Daily on October 26, the memory chip company SK Hynix plans to return 80% of the proceeds from the sale of its stake in the Japanese NAND manufacturer Kioxia to shareholders as a special dividend. The report cites investment banks and financial industry sources estimating the related proceeds to be around 20 trillion Korean won, with the special dividend expected to be about 16 trillion Korean won. The company intends to announce this plan during the third-quarter earnings release on October 28. Currently, this is an industry expectation and not an officially confirmed announcement by the company.Based on the current number of shares issued, the special dividend amounts to approximately 23,000 Korean won per share, which is 15 times the annual fixed dividend of 1,500 Korean won per share and 61 times the quarterly dividend of 375 Korean won. Whether the payment will be made in installments is still under consideration. Last year's total dividend was 2.1 trillion Korean won. The company stated during the second-quarter earnings call that it is exploring various additional ways to return value to shareholders and will share the details once determined within the year.In 2018, SK Hynix participated in a consortium led by Bain Capital to acquire the NAND business spun off from Toshiba, which was renamed Kioxia in 2019. The total investment by the company was approximately 395 billion Japanese yen, of which the fund's contribution has been sold in phases by Bain and fully recovered. In the first quarter of this year, part of the disposal recovered 4.1178 trillion Korean won, and after further disposal in the second quarter, the estimated proceeds, excluding the principal, are around 20 trillion Korean won. Kioxia's stock price rose from about 10,000 Japanese yen at the end of last year to a historical high of 112,700 Japanese yen on June 22 this year.

South Korean chip companies Samsung Electronics and SK Hynix will release their third-quarter financial reports next week, with strong demand for artificial intelligence storage chips expected to drive substantial profits for both companies.SK Hynix is scheduled to announce its financial report on Wednesday, while Samsung Electronics will follow closely on Thursday.

According to Gate market data, U.S. semiconductor stocks rose broadly before the market opened, with SK Hynix up 5.5%, SanDisk up 2.8%, and Micron Technology up 2.62%.

According to the Science and Technology Innovation Board Daily, SK Hynix announced that its overseas subsidiary Solidigm had previously considered expanding capacity and enhancing competitiveness through various financing options. However, after considering factors such as the capital market environment, it has decided to stop advancing its Pre-IPO and initial public offering plans.Earlier reports indicated that Solidigm planned to conduct Pre-IPO financing amounting to 50 trillion Korean won. Solidigm is the flash memory business under SK Hynix.

According to a report by the Korean News Agency, the storage chip manufacturer SK Hynix completed a large-scale stock buyback on the 21st, following Samsung Electronics in completing the related operation. The company stated that it completed a stock buyback worth 40 trillion won on the Korea Exchange, which lasted for two months.Previously, SK Hynix announced that it would invest 40.0434 trillion won to buy back 24.07 million shares, all of which would be canceled after the buyback, accounting for approximately 3.3% of the total issued shares, and stated that this is the largest stock cancellation operation by a listed company in South Korea. The original buyback period was set from August 20 to November 19, but it was completed about a month ahead of schedule.

According to Gate market data, the South Korean KOSPI index closed down 214.93 points on October 20 (Tuesday), a decrease of 3.73%, reporting at 5553.08 points. Samsung Electronics fell by 2.98%, and SK Hynix fell by 4.22%.

According to Gate market data, U.S. stocks closed on Monday with the Dow Jones Industrial Average initially down 0.07%, the S&P 500 index up 0.4%, and the Nasdaq up 1.1%. SK Hynix rose 4.6%, Micron Technology increased nearly 3%, Tesla rose 3.7%, and Amazon increased nearly 5%.The Nasdaq Golden Dragon China Index closed down 0.26%, and iQIYI fell over 2%.

According to data recently released by financial data provider FnGuide, as of October 15, the total estimated value of shares held by the National Pension Service (NPS) in 287 listed companies with a holding ratio of 5% or more has shrunk from 515.93 trillion Korean won at the end of June to 333.53 trillion Korean won, a decrease of approximately 182 trillion Korean won, equivalent to about 13.7 billion USD.The shrinkage is mainly related to the fund's heavy holdings in Samsung Electronics and SK Hynix. The market value of SK Hynix held by NPS has evaporated by approximately 74.2 trillion Korean won, while the market value of Samsung Electronics has decreased by 56.9 trillion Korean won, with these two stocks accounting for about 72% of the total decline in market value.NPS is the largest pension fund in South Korea, managing assets worth 1866 trillion Korean won, approximately 1.35 trillion USD, as of the end of June. The investment return rate in the first half of this year reached 27.2%, the best level for the same period since 2022, but the market reversed in just a few months, marking the first quarterly decline in market value for its core heavy holdings since the fourth quarter of 2024.NPS has long listed Samsung Electronics and SK Hynix as its top two domestic stock holdings, maintaining a holding ratio of over 7%. In May of this year, the fund's operating committee also raised the year-end target allocation for Korean stocks. After reaching a peak in June, stock prices quickly corrected, and by mid-October, SK Hynix had fallen more than 50% from its peak, while Samsung Electronics had retreated about 40%.The concentrated sell-off by foreign investors has been the direct driver of the decline, with the two companies accounting for nearly 80% of the total net selling by foreign investors. Market discrepancies regarding AI storage prosperity, advancements in Chinese storage technology, and the high volatility of individual stock leveraged ETFs have also amplified the declines. The KOSPI index in South Korea reached a historical closing high of 9114.55 points on June 22, but had fallen by about 39% as of October 15. During this period, NPS's holding ratio of SK Hynix shares decreased from 7.5% to 7.32%, while the holding ratio of Samsung Electronics remained at 7.84%.Bank of America’s research report on October 16 suggests that the valuation of storage stocks may have bottomed out after about three and a half months of adjustment, and that storage chip prices and profits are still expected to remain high from 2027 to 2028. There are also views warning that if global AI companies cut capital expenditures, there may still be room for downward adjustments in the earnings expectations of the two companies. As of now, NPS has not made a formal response regarding the significant shrinkage in market value of its holdings.

According to Bloomberg, Asian semiconductor stocks continued to weaken on Monday. The Bloomberg Asia Chip Index fell more than 2%, reaching its lowest level since July, with TSMC, SK Hynix, and Advantest being the main drags. The Korea Composite Stock Price Index recorded its largest weekly decline since October 2008 last week, dropping more than 3% at one point on Monday before recovering some ground; the Nikkei 225 index fell 2.3% at one point, and the Taiwan Weighted Index dropped 2%.Market concerns stem from two aspects. First, the pressure on financing for AI infrastructure in the United States continues to ferment, with CoreWeave's financing capabilities being questioned and the IPO expectations for Anthropic and Nscale cooling. Second, Chinese AI company DeepSeek released a new model update over the weekend, claiming faster operation speeds and lower resource consumption, raising concerns about the potential decrease in storage capacity required for AI models and the possible impact on chip demand.Kang DaeKwun, CEO of Life Asset Management, stated that the market uncertainty is too high, making it difficult to determine when the Korean stock market will bottom out. Financing for U.S. corporate AI projects is one of the main risks, and the profitability of Korean chip companies still heavily relies on continuous investment in AI infrastructure by U.S. companies. This week, the earnings reports from tech giants like Meta and Tesla will be an important window to observe the growth momentum of AI capital expenditures.