A stock that rises more than 12 percent in a single session and closes at an all-time high is almost theatrical, and on May 4, SK Hynix did just that, closing at 1,447,000 won. The number is heavy in and of itself. The same shares were trading near 185,900 won a year ago, and Monday’s print made even the more recent April average seem modest. While most people were focused on other things, it was difficult to ignore the sense that something had quietly changed in the memory chip industry as the move was shown on screens in Seoul, Hong Kong, and New York.
On paper, the catalyst was well known. During the Korean holiday break, American tech companies released their earnings and stated that they have no plans to reduce their investment in AI infrastructure. Since SK Hynix is located close to the bottom of the slope and provides the high-bandwidth memory chips that enable Nvidia’s accelerators to be truly useful, that message tends to flow downhill very quickly. Investors appear to think it is now nearly impossible to get around the company. The supply-demand equation continues to tighten in its favor for the time being, but it remains to be seen if that will still be the case in two years.
Barclays kept its Overweight rating and increased its Frankfurt-listed price target by more than 20% on Monday, adding fuel to the fire. The note contained a statement that has been subtly circulating among traders: the memory supply-demand gap “shows no signs of improving any time soon.” Analysts don’t use language like that lightly. Additionally, the bank increased its projected earnings multiple from 5x to 6x in 2026. This may not seem like much when you consider a stock that is the first Korean company outside of Samsung Electronics to have a market capitalization of more than 1,000 trillion won.
The labor angle is what distinguishes the SK Hynix story from the larger chip rally. Citigroup has already lowered its projections because it believes that any settlement will reduce profits, and Samsung is facing the possibility of an 18-day work stoppage beginning on May 21. Earlier in the year, SK Hynix concluded its own profit-sharing negotiations, and the stock’s relative performance is now reflecting that small amount of housekeeping. In Seoul, there is a perception that the two companies’ differences on Monday were more about timing than strategy.
The KOSPI itself increased by 5.12 percent to 6,936.99, barely missing the psychological finish line of 7,000. A record 3.57 trillion won was purchased by foreign investors. Samsung and SK Hynix together now hold 42.2% of the total market capitalization of KOSPI, a concentration that nearly doubled in less than a year. That statistic is a little unsettling to some seasoned market observers. A market that has such a strong preference for two names is usually fantastic when it’s rising and harsh when it’s falling. On Monday, more stocks fell than rose, which speaks for itself.
Whether this is the supercycle peak or just a checkpoint is still unknown. The Bank of Korea now seems to be leaning toward rate hikes, which have historically put pressure on growth multiples, and new fab capacity won’t come online in any significant way until 2027 or 2028. The same furnaces, wafers, and engineers passing by the same parking lots are all still in use outside the SK Hynix campus in Icheon. The stock chart appears dramatic. Presumably, the factory floor is exactly as it was a week ago.
